The divergence in monetary policy regarding Crypto Assets between China and the US intensifies, Bitcoin may become the new battleground.

Recently, U.S. President Trump signed an executive order to promote the development of Crypto Assets while prohibiting the establishment of a U.S. central bank digital currency (CBDC). This move stands in stark contrast to China's proactive approach towards the digital yuan, highlighting the policy differences between the two countries in the digital finance sector.

Trump's executive order emphasizes the importance of the digital asset industry for America's innovation, economic development, and international leadership. The order proposes the establishment of a national digital asset reserve and provides protections for developers and miners. Additionally, the order supports the development of globally legitimate, dollar-backed stablecoins to uphold dollar sovereignty.

At the same time, China is actively promoting the application of the digital renminbi. As of July 2024, the digital renminbi application has attracted 180 million individual wallet users, with a total transaction volume of 7.3 trillion yuan in the pilot areas. China is also participating in the multilateral CBDC project mBridge, exploring new models for cross-border payments and settlements.

However, there are still differences in attitudes towards Crypto Assets such as Bitcoin between China and the United States. Wang Yongli, former deputy governor of the Bank of China, believes that Bitcoin does not meet the essential requirements of currency and needs to be viewed rationally and objectively. Zhou Xiaochuan, vice chairman of the Boao Forum for Asia and former governor of the People's Bank of China, warned about the potential impact of digital Crypto Assets on global financial stability and security.

It is noteworthy that China is exploring institutional opening in the financial sector. Recently, the opinions jointly issued by five departments including the People's Bank of China proposed supporting mainland residents of the Guangdong-Hong Kong-Macau Greater Bay Area to purchase qualified investment products through Hong Kong and Macau financial institutions. This may provide new opportunities for the development of the Crypto Assets industry.

Experts point out that if Hong Kong's Crypto Assets products can provide investment channels for mainland investors through the cross-border wealth management connect, it will not only enrich the asset allocation options for mainland residents but may also become an important tool for promoting the internationalization of the Renminbi.

As 134 countries around the world (accounting for 98% of the global economy) are exploring digital versions of their national currencies, the development of CBDCs has become an important trend in the international financial sector. However, the United States' attitude towards CBDCs contrasts with that of most countries, reflecting its concerns about government intervention in the financial industry.

In response to this trend, China is actively promoting the expansion of application scenarios and the technological improvement of the digital yuan. Dong Zhiyong, a scholar from Peking University, suggested that a reasonable charging mechanism should be established, and payment institutions should jointly explore value-added services, while creating ecosystems for industrial and commercial use cases to enhance the acceptance and usage rate of the digital yuan.

As the policy differences between China and the United States in the field of digital finance become increasingly evident, cryptocurrencies such as Bitcoin may become a new battleground for competition between the two countries. This situation will have a profound impact on the global financial landscape and deserves continued attention.