Is China Secretly Holding 195K BTC? Chinese Bitcoin Reserves: Will Beijing Follow the US and Build a Crypto Empire?

The creation of a formal U.S. Strategic Bitcoin Reserve prompts questions about China’s potential reaction in the digital asset realm. This initial move by the U.S. towards national Bitcoin holdings stimulates speculation about how China could formulate its own approach to digital currency, particularly concerning maintaining its competitive standing in global finance.

While no official announcements from China regarding Chinese Bitcoin reserves have emerged, existing indications suggest some form of internal debate is in progress. Previously documented seizures by China involving considerable quantities of BTC provoke ongoing discussions about whether they retained these holdings. Should Beijing adopt a Chinese Bitcoin reserves framework akin to the U.S., they might solidify their importance as participants in the unfolding cryptocurrency environment.

China’s Crypto Holdings: A Mystery in the Making

The official position of the Chinese government concerning Bitcoin lacks clarity. However, prior incidents indicate possible substantial national reserves. Around 2020, nearly 195,000 BTC were seized by Chinese officials connected to the PlusToken Ponzi scheme. Official accounts stated these were transferred into state control, but the fate of these seized holdings remains uncertain. They were neither definitively retained nor liquidated, at least publicly.

Comparatively, the U.S. government currently maintains about 198,000 BTC. These holdings are designated for safekeeping through presidential directives and factored into national planning initiatives for the foreseeable future. Furthermore, the U.S. government plans to procure additional Bitcoin through fiscally responsible means, demonstrating a dedicated position on cryptocurrencies. If the Chinese authorities adopt similar approaches, they might become prominent Bitcoin custodians on a global scale.

Beijing’s Potential Response: Competitive or Cautious?

Although China maintains restrictive policies regarding cryptocurrency activity, some analysts propose that the nation might entertain establishing Chinese Bitcoin reserves. On March 3rd, David Bailey, a proponent of Bitcoin, asserted the existence of confidential discussions surrounding the future of Bitcoin in China; these reports lack official corroboration to date.

China is now working double time to stand up their own Strategic Bitcoin Reserve.

They’ve been holding closed door meetings on the topic since the election.

— David Bailey🇵🇷 $0.85mm/btc is the floor (@DavidFBailey) March 2, 2025

In contrast to prohibitions targeting private cryptocurrency operations, China has actively developed blockchain technology and advanced its digital yuan initiative. This shows an awareness of digital assets’ significance in international finance, despite reluctance to openly embrace Bitcoin as might be seen in countries like the United States. Accumulating and holding Bitcoin could protect China against escalating Western economic power within the cryptocurrency sphere.

Hong Kong’s Role in the Digital Asset Strategy

Even without a formal announcement of Chinese Bitcoin reserves, Hong Kong is likely to exert considerable influence on how the country views digital assets. Under China’s “one country, two systems” arrangement, Hong Kong crypto regulations are less strict, permitting looser oversight. This distinctive regulatory position is crucial.

Notably, in December 2024, Wu Jiexhuang, a member of Hong Kong’s Legislative Council, raised the idea that the region evaluate the repercussions of Bitcoin ETFs in the United States prior to developing a comparable framework in Hong Kong crypto regulations. Because of Hong Kong’s role as a prospective experimental hub, China has an opportunity to observe the success, challenges, and societal effects related to Bitcoin uptake before making a definitive dedication at the national level. This indirect approach enables Beijing to calculate risk assessments concerning a highly decentralized asset class.

A New Era of Bitcoin Reserves?

The United States’ increasing institutional integration of Bitcoin is altering the global financial system. China has a choice: embrace a similar approach by establishing its own Bitcoin reserves or maintain its current regulatory framework without direct engagement. Despite ambiguity around Beijing’s future direction, Bitcoin’s importance in international financial operations continues to grow. China’s potential reentry into cryptocurrency markets raises questions about the future of Bitcoin in China and could reshape the digital economy, potentially encouraging global sovereign adoption.