Solana Chairman Predicts China Will Find Way Back Into Crypto Market

Joseph Chee, executive chairman of Solana Co., told the Wall Street Journal that China will find a way to manage cryptocurrency despite strict regulations. Chee's comments come as the Chinese government has maintained a ban on domestic crypto trading and mining since 2021.

The ban was introduced in two stages: first with initial coin offerings and fundraising in 2017, and then with all crypto transactions being declared illegal in 2021. However, Hong Kong has taken a different approach, introducing a licensing regime for retail crypto investors in 2023.

Chee suggests that Hong Kong could serve as a testing ground for potential changes in mainland policy, allowing the Chinese government to observe outcomes before making any decisions. Beijing's management of crypto could involve restricted access, with licensed venues under close state surveillance or only providing access to funds and financial firms while keeping individuals out.

A reopening of China to crypto could bring less new money into SOL than it seems, as some investors have already used indirect methods to access cryptocurrency despite the ban. Chinese buyers may shift from unofficial channels to official ones if Beijing eases its restrictions, but there is no reliable measure of this indirect flow.