Earlier this year, some reports suggested that China might be changing its tune on crypto due to some cryptocurrency in Hong Kong.
However, according to a Tuesday report by Caixin Global, Beijing regulators have ordered local tech and financial firms to scale back their crypto activities.
Crypto mirage
Earlier this year, Hong Kong, one of the world's biggest financial centers that also boasts the biggest number of skyscrapers, emerged as a new hotspot for cryptocurrency activity.
Chinese mainland tech and financial firms rushed to join the hype in order to experiment with stablecoins and tokenization in accordance with the region's new licensing regime.
However, while some hoped that this could be a sign of China changing its tune on crypto, Beijing quickly intervened to curb the hype.
The mainland firms are now required to reduce exposure to offshore crypto assets and curb speculative activity.
Beijing regulators specifically took issue with the fact that some mainland companies were attempting to circumvent mainland restrictions with the help of Hong Kong.
Tech companies have been told to stop dealing with cryptocurrencies like Bitcoin or Ether (ETH), while state-owned banks will not be able to pursue stablecoin licenses in Hong Kong
China's anti-crypto stance
It is worth noting that China has been hostile toward crypto for more than a decade. In 2013, the country's central bank issued its very first Bitcoin warning. After this, financial institutions were gradually barred from dealing with crypto.
The infamous ban on initial coin offerings (ICOs) and local crypto exchanges turned China into one of the most anti-crypto countries.
In 2021, China ended up outlawing virtual mining equipment.
