Chee Predicts China Will Reenter Crypto Market, But Rules May Limit SOL Demand

Solana Co.'s executive chairman Joseph Chee told the Wall Street Journal that China will eventually find a way to manage cryptocurrency, despite years of strict regulations. Chee believes that a relaxation of China's crypto ban could let mainland buyers back into the market for Solana (CRYPTO: SOL) and other major cryptocurrencies.

However, Chee leads a company focused on buying and holding SOL, so his comments may be seen as self-serving. SOL trades near $121 as of October 4, down 2.6% over the past week, after a substantial 48% increase in the third quarter. The Chinese government has not announced any changes to its existing bans on domestic crypto trading and mining.

China has banned crypto trading since 2021, while Hong Kong introduced a licensing regime for retail crypto investors in 2023, allowing platforms like OSL to facilitate retail trading. Chee mentions that Hong Kong could serve as a testing ground for potential changes in mainland policy. This dual-track approach allows mainland China to maintain strict regulations while Hong Kong experiments with looser rules, giving Beijing a chance to observe the outcomes.

Even if China decides to regulate crypto, it might still restrict access to most individuals. The government could allow only licensed venues under close state surveillance, or provide access to funds and financial firms while keeping individuals out. Other possibilities include permitting individual trading with limits and eligibility criteria, or allowing people to hold cryptocurrencies without the option to buy or sell on domestic platforms.