China is one of the most crypto and Bitcoin-hostile countries on earth. Back in 2017, the People’s Bank of China (PBOC) banned the operation of exchanges in China. In May 2021, Chinese authorities ordered a ban on Bitcoin mining. At the end of September 2021, the Chinese central bank banned all crypto transactions.
Nevertheless, the controversial founder of Tron, Justin Sun, believes that China could soon celebrate a crypto comeback. In a Twitter thread, Sun wrote that China has taken a big step towards regulating the industry by introducing a tax on transactions.
This signals the country’s increasing embrace of cryptocurrencies. The tax on transactions is a clear indication that the Chinese government views cryptocurrencies as a legitimate form of wealth and wants to ensure its proper taxation.
Is China Preparing For A Crypto Comeback?
In this sense, Sun expects that the tax policy will encourage the adoption of cryptocurrencies in the country, as it provides a clear regulatory framework for individuals and businesses.
Moreover, the Tron founder claimed that “with the increasing use of cryptocurrencies in China, it is expected that the government will further regulate the crypto industry, providing further legitimacy and stability.”
In addition, Sun theorizes that the crypto tax in China could be a positive development for the entire global market and a precedent for other countries to follow. “Both TRON and Huobi have a strong focus on innovation and have been instrumental in driving the growth and development of blockchain technology in China,” he concluded.
However, not everyone interprets the tax as a signal of a turnaround in China’s policy. Given the speculations that private digital assets like Bitcoin have been banned from China due to the introduction of the Central Bank Digital Currency (CBDC), a policy reversal seems very sudden.
Chinese journalist Collin Wu, however, disagreed with the Tron founder. “Some have taken this to mean that the Chinese government may recognize the legitimacy of cryptocurrencies, but the reality is clearly more complex, with tax authorities and financial authorities having differing views,” Wu said.
Wu first reported on January 25 that some local tax authorities in China have begun imposing a 20% personal income tax on the investment profits of individual investors as well as many Bitcoin miners.
The Bitcoin Price Today
At press time, the Bitcoin price was at $23,327 after failing to break the $24,000 mark yesterday. Today, the market enters the most important week of the year so far. As Bitcoinist reported, in addition to the FOMC meeting on Wednesday, there are other key events coming up.
Investors should therefore prepare for a volatile week. For Bitcoin, the resistance zone above $24,000 is currently crucial, while the support of around $22,700 on the downside should be observed.
Featured image from RABAUZ / Pixabay, Chart from TradingView.com
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