Why Chinese Cryptocurrencies Could Soar in the Coming Weeks

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Although China hasn’t been very welcoming to cryptocurrencies since its decision on a blanket digital asset ban at the end of 2021, some Chinese cryptocurrencies saw a major rally in February this year. As the country’s central bank is currently pushing for a faster recovery from the pandemic-induced slump, it is possible that a similar rally will emerge in the coming days.

Central bank pushes stimulus efforts

The People’s Bank of China (PBOC) announced on Friday that it will reduce the amount of cash banks are required to hold as reserves – also known as the bank’s reserve ratio – for the first time this year. . The objective of this decision is to help maintain sufficient liquidity and support an emerging economic recovery.

Read more: Why is the price of Bitcoin rising?

The central bank has announced that it will cut the reserve requirement ratio (RRR) for all banks by 25 basis points (bps) starting March 27. However, this reduction does not apply to banks that have already adopted a 5% reserve ratio.

China’s changing stance for crypto

Despite the open presumption that China is taking an anti-crypto stance, recent developments have indicated otherwise. It seems that officials from the Chinese Liaison Office are interested in Hong Kong’s cryptocurrency progress. These officials would study the country’s approach to digital assets, which many people see as a net positive for the industry.

However, this trend is not limited to governments alone; private companies on the Chinese mainland are also investigating Web3 technologies and the use of cryptography. China Telecom, for example, has collaborated with major crypto firms to develop SIM cards based on blockchain technology.

The culmination of all these reasons, in addition to the constructive steps taken by the central bank to support a faster recovery, is helping to build a positive attitude towards cryptos that falls under the “Chinese narrative”.

Chinese Crypto Coins Will Rally

A number of well-known Chinese cryptocurrencies have already seen significant price increases in recent months, with Conflux surging nearly 124% in the past seven days.

NEO, another top Chinese layer 1 blockchain, may see further gains in the coming days as China’s narrative gains momentum. The price of NEO saw a significant rise today as it is currently trading near the $12 level with a market capitalization of around $844 million.

VeChain, Polkadot, IOST, and Filecoin are some of the other notable Chinese cryptocurrencies that have the potential to rise in value in the days to come. And, to add more positive momentum to the rally, Bitcoin’s price is already on a tear breaking above the coveted $26,000 mark – leading to bullish sentiment for the entire crypto market.

Also Read: How to Claim Arbitrum Token Airdrop (ARB) – Eligibility, Date and Process

Pratik has been a crypto evangelist since 2016 and has covered almost everything crypto has to offer. Whether it’s the ICO boom, the bear markets of 2018, the Bitcoin halving so far – he’s seen it all.

The content presented may include the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. The author or publication assumes no responsibility for your personal financial loss.

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