China plans to sell seized crypto through Hong Kong licenses to boost market power and control prices globally.
- Hong Kong’s new LEAP policy strengthens crypto regulations and licensing.
- China will use Hong Kong exchanges to inject crypto liquidity strategically.
- This move could give China major influence over global crypto markets.
China Turns to Hong Kong for Crypto Moves
China is taking a new approach with crypto. It plans to sell confiscated digital assets through licensed exchanges in Hong Kong. This isn’t just about selling coins. It’s part of a bigger strategy to control market liquidity. Liquidity helps determine prices in global markets. With this decision, China is using Hong Kong as a market hub to manage crypto flows.
Regulations Building a Strong Foundation
Hong Kong began building its crypto laws years ago. In 2022, it passed a law that made crypto trading platforms follow strict rules. The Anti-Money Laundering Ordinance made sure trading was transparent and safe. Then, in 2025, it added rules for stablecoins—digital money tied to real money. These coins must be backed with 1:1 reserves and follow strong safety checks.
In June 2025, the LEAP Digital Assets Policy Statement 2.0 launched. This plan brings all crypto rules into one system. It also supports talent training and new digital finance products. The goal is to make Hong Kong a world leader in digital assets.
Liquidity as a Strategic Tool
Liquidity means how easily an asset can be bought or sold. When markets have high liquidity, prices stay stable. China’s choice to sell assets through Hong Kong does more than meet rules—it gives Beijing power to influence markets quickly.
In contrast, the United States holds Bitcoin in reserves but does not trade it freely. This “hold-only” method limits its ability to react to market changes. China’s method lets it respond to changes fast, moving prices up or down as needed.
Global Impact and Market Control
This strategy may give China power over global crypto markets. Hong Kong’s mix of strict laws and free liquidity offers unique control. Other places like Singapore or Dubai have strong rules but lack Hong Kong’s mix of scale and access to seized crypto.
China’s move could reshape the crypto world. By using Hong Kong as its trading center, it can attract big investors and influence market trends. Governments and investors must now adjust their strategies to this new reality.
Source: cointelegraph.com
