CNBC's The China Connection newsletter: Rumblings of a crypto race

America's AI contention with China is coming for cryptocurrencies.

At slightest that's what U.S. President Donald Trump suggested pursuing his meeting past Thursday with Chinese President Xi Jinping — a commercialized negotiation intimately watched astir the world.

"I wanna marque crypto large for America," Trump told CBS News. "The aforesaid mode we're fig 1 with AI, we're fig 1 with crypto. And I wanna support it that way."

"I don't privation China oregon anybody other to instrumentality it away," helium said.

Whether Trump genuinely views Beijing arsenic a superior menace oregon not, his remarks travel arsenic China sends caller signals connected its crypto ambitions. Beijing has banned home crypto transactions since 2021, portion Hong Kong, a peculiar administrative portion of China, has maintained a managed strategy that encourages the improvement of digital assets.

On Monday, Hong Kong eased its restrictions further — allowing its licensed virtual plus trading platforms to link straight with planetary crypto exchanges and database caller integer assets and Hong Kong-regulated stablecoins, forgoing the request for a 12-month way record.

The announcement coincided with Hong Kong's state-organized 10th FinTech Week, which opened conscionable arsenic the governmental and concern spectacle successful South Korea began to fade.

Hong Kong has been speedy to travel Washington's lead, allowing exchange-traded funds tracking spot  last year, and went a measurement further by approving spot ether ETFs to commercialized astir 3 months before the U.S. did.

Bitcoin, often likened to integer gold, remains the astir recognized cryptocurrency. Ether, different large integer currency connected the Ethereum network, is utilized some for payments and arsenic "gas" to wage for computation and tally astute contracts connected decentralized applications.

Ethereum Foundation's co-executive manager Tomasz K. Stańczak, speaking astatine a integer assets forum Sunday connected the sidelines of Hong Kong's FinTech week, noted that implicit 60% of stablecoins —cryptocurrencies pegged to government-issued currencies— are deployed connected the Ethereum network.

In the assemblage of astir 300 people, astir 70% came from accepted finance, according to Gavin Wang, main concern serviceman astatine SNZ Holdings, a integer assets concern steadfast that helped signifier the forum.

That contrasts with however specified events utilized to pull much bundle developers, said Wang, who antecedently worked astatine UBS. The forum besides announced an "Ethereum Hong Kong Hub," a co-working abstraction to incubate related startups, reflecting the city's increasing power arsenic Asia's crypto gateway.

Even large manufacture players are taking notice. Consensus, 1 of the world's biggest crypto conferences successful North America, expanded to Hong Kong for the archetypal clip this year, and plans to instrumentality successful 2026.

Still, integer assets stay comparatively nascent comparative to accepted markets. The full worth of cryptocurrencies has yet to transcend $4.5 trillion, planetary banal markets are inactive acold larger astatine $101.52 trillion.

Bitcoin fell sharply successful the past fewer weeks pursuing concerns astir escalating U.S.-China commercialized tensions and frothy AI banal valuations, briefly dipping beneath $100,000 for the archetypal clip since precocious June.

"My presumption is it's much oregon little the aforesaid radical of [investors] switching astir AI and crypto," said Jason Huang, founding spouse of NextGen Digital Venture (NDV), an Asia-based money invests successful cryptocurrencies and related stocks. "Once AI cools down a bit, I deliberation crypto volition travel back."

Huang's $100 cardinal money surged by 375.5% successful the 2 years done March 2025 — outperforming bitcoin by much than 60% during that play — and he's present launching a 2nd fund. He said galore of his investors are affluent Chinese, adding that subscriptions person accrued contempt the caller selloff.

According to Huang, his money was down lone successful the azygous digits past month, contempt the , which helium said was the azygous largest liquidation time for crypto, even surpassing the infamous FTX speech collapse.

The adjacent signifier of contention whitethorn not beryllium astir tokens themselves, but astir control. Governments are progressively anxious to power the marketplace done stablecoins backed by their ain fiat currencies.

Much of the caller excitement implicit integer assets successful Hong Kong stems from its propulsion into stablecoins this year, pursuing the U.S. Genius Act, which aims to enactment dollar-pegged stablecoins. It's taking the U.S. dollar contention with the Chinese yuan into the integer era.

"Both are striving to grow their ain currency usage to physique up their respective planetary idiosyncratic ecosystem," said Winston Ma, adjunct prof of instrumentality astatine the New York University School of Law.

But it won't beryllium easy, helium pointed out, arsenic Beijing has yet to person individuals to follow the integer yuan astatine scale, which is China's cardinal bank–issued integer currency designed to regenerate immoderate currency transactions portion allowing tighter oversight of its fiscal system.

China has sought to beforehand a integer mentation of its yuan currency successful caller years but it has yet to interruption into the mainstream.

"U.S. dollar stablecoins whitethorn acquisition the aforesaid erstwhile they commencement to emerge," Ma said.

The U.S. dollar accounted for conscionable nether fractional of planetary payments by worth successful September, tracked by planetary fiscal messaging work SWIFT, portion the Chinese yuan climbed 1 spot into 5th spot with a 3.17% share.

Last week, China's cardinal slope politician Pan Gongsheng promoted the digital yuan, portion taking a much blimpish presumption of stablecoins than galore expected, reaffirming Beijing's long-standing restrictions connected speculative trading successful virtual currencies.

Still, bitcoin blockchain information showed China remains a large player, ranking 3rd successful planetary bitcoin mining enactment — down the U.S. and Russia.

That's not a statistic Trump is apt to overlook. Forbes estimates the U.S. president himself holds astir $870 cardinal worthy of bitcoin—one of the world's largest idiosyncratic stashes.

— CNBC's Anniek Bao contributed to this report.

U.S.-China scope one-year commercialized truce. If the latest U.S.-China commercialized deal is finalized, tariffs are expected to enactment lower, and large-scale disruptions to uncommon earths commercialized are improbable implicit the adjacent 12 months.

Nvidia successful China. As the chipmaker stays mostly locked retired of a $50 cardinal market, CEO Jensen Huang connected Friday acknowledged that "China doesn't privation H20 oregon immoderate American chips."

China's mill enactment slumps. The authoritative purchasing managers' scale and its backstage assemblage counterpart some showed a drop successful manufacturing successful October from September amid U.S. commercialized tensions.

Chinese markets roseate 0.46%, defying a broader determination diminution arsenic investors pulled backmost from AI-related stocks.

The Hang Seng Index was small changed, portion the CSI 300 has gained astir 18% truthful acold this year.

The offshore Chinese yuan past traded astatine 7.1307 against the dollar.

— Lee Ying Shan

The show of the Shanghai Composite implicit the past year.

Nov. 5 - 10: China International Import Expo successful Shanghai

Nov. 6 - 9: China's "Six Little Dragons" AI startups to clasp a roundtable during the World Internet Conference successful Wuzhen

Nov. 7: Exports, Imports for October

Nov. 9: CPI, PPI for October