Although China hasn’t been much welcoming to cryptocurrencies since its ruling of a blanket ban on digital assets back in late 2021, certain Chinese crypto coins have experienced a significant rally back in February of this year. While the country’s central bank is currently pushing for a quicker recovery from the pandemic-induced slump, it’s possible that a similar rally might take shape in the coming days.
Central Bank Pushes Recovery Efforts
The People’s Bank of China (PBOC) announced on Friday that it would reduce the amount of cash that banks are required to hold as reserves — also known as the bank’s reserve ratio — for the first time this year. The purpose of this move is to assist in maintaining sufficient liquidity and to support an emerging economic recovery.
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The central bank announced that it would reduce the reserve requirement ratio (RRR) for all banks by 25 basis points (bps) beginning on March 27. However, this reduction does not apply to banks that have already adopted a reserve ratio of 5%.
China’s Changing Stance For Crypto
Despite the open-ended presumption that China bears an anti-crypto stance, recent developments have indicated otherwise. It appears that officials from China’s Liaison Office are interested in Hong Kong’s progress with cryptocurrency. These officials are reportedly studying the country’s approach towards digital assets, which many people believe to be a net positive for the industry.
However, this trend is not confined to just governments; private companies on the Chinese mainland are also investigating Web3 technologies and the use of crypto. China Telecom, for instance, has been collaborating with major crypto firms to develop SIM cards that are based on blockchain technology.
The culmination of all of these reasons, in addition to the constructive measures taken by the central bank to support a more rapid recovery, is assisting in building a positive attitude regarding the cryptos that fall under the “China narrative”.
Chinese Crypto Coins To Rally
A number of well-known Chinese cryptocurrencies have already seen their prices rise significantly in recent months, with Conflux increasing by almost 124% over the past seven days.
NEO, another prominent Chinese Layer-1 blockchain, might experience incremental gains in the coming days as the China narrative gains more steam. The price of NEO witnessed a significant uptick today, as it currently trades near the $12 level with a market capitalization of roughly $844 million.
VeChain, Polkadot, IOST and Filecoin are a few of the other noteworthy Chinese crypto coins that have the potential to appreciate in value in days to come. And, to add more positive momentum to the rally, Bitcoin’s price is already on a tear by surpassing the coveted $26,000 mark — which has resulted in bullish sentiment for the overall crypto market.
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