Articleover 3 years ago

The Connection Between Hong Kong's National Security Law and Cryptocurrency Transactions

The Connection Between Hong Kong's National Security Law and Cryptocurrency Transactions
Summary
  • The proposal and implementation of Hong Kong's national security law have led to spikes in transactions of stablecoins, as individuals seek to protect their assets from potential confiscation.
  • Middle-aged and older people in Hong Kong are resorting to stablecoins to transfer their money in case of a worst-case scenario where their funds could be seized by the government.
  • Encrypted messaging services such as Telegram are used in Hong Kong to facilitate over-the-counter trades of stablecoins, helping individuals bypass state surveillance and capital controls.
  • Stablecoins effectively remove a lever for censorship, providing individuals with one less thing that the government can take away to control citizens.
  • The Chinese government's crackdown on cryptocurrencies contrasts with its aim to be a dominant player in blockchain technology. Private, closed blockchains are preferred for managing legal documents, while public, "permissionless" blockchains are more prevalent in the West.
  • The government's posture can be attributed to the ease with which public blockchains enable cryptocurrency tokens, which can be used for capital flight out of China, thus challenging the Communist Party's goal of financial stability.
  • Chinese companies like Alibaba are actively pursuing patents for private blockchains, indicating their interest in harnessing blockchain technology for various purposes.

For more insights on the relation between human rights, blockchain, and China, listen to the conversation on the Follow the White Rabbit podcast.

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