Bitcoin and Crypto Investor Brock Pierce Says It's Only a Matter of Time Before China Reopens Its Digital Doors to Crypto

China's president Xi Jinping has overseen a bitcoin and crypto crackdown in China that's weighed on the price of bitcoin, ethereum, XRP and other major cryptocurrencies.

This week, G7 leaders are set to warn small banks in China over their Russia ties after sanctions have "stoked the use of underground financing channels or banned cryptocurrency," according to Reuters.

During this week's G7 meeting of wealthy democracies in Italy, leaders will reportedly send a tough new warning to China's small banks to stop helping Russia evade Western sanctions, with meetings set to focus on the threat posed by burgeoning Chinese-Russian trade to the war in Ukraine.

In April, it was reported that after China's big banks pulled back from financing Russia-related transactions, some China companies have turned to small banks on the border and cryptocurrency.

"Our concern is that China is increasingly the factory of the U.S. war machine. You can call it the arsenal of autocracy when you consider Russia's military ambitions, which obviously threaten the existence of Ukraine, but increasingly European security, NATO and transatlantic security," Daleep Singh, deputy national security adviser for international economics, was quoted as saying by Reuters.

Following the implementation of U.S.-led Western sanctions on Russia in the aftermath of its invasion of Ukraine, bitcoin and crypto were touted by some as a potential way to evade the strict financial rules.

Last month, attendees of a Hong Kong bitcoin conference sparked speculation the much-hyped Hong Kong spot bitcoin ETFs could eventually be opened up to mainland China investors.

"I think Hong Kong is leading the way in many respects," Pierce said. "I think the main opportunity in Hong Kong is in [traditional finance], and that's where a Hong Kong digital dollar stablecoin has great potential."

Pierce added that China's supply chain advantage means "there's clearly a very big opportunity that exists [in Hong Kong]."

This week, there were further signs Hong Kong and China are gradually warming back up to bitcoin and crypto, with Dubai-based crypto exchange Bybit announcing it will allow Chinese nationals living overseas to open accounts and trade crypto.

"Bybit, one of the world's top three crypto exchanges by volume, is pleased to announce the expansion of our service offerings to the overseas Chinese community," the company said in a statement. "This move is in response to the growing demand for secure, reliable, and user-friendly cryptocurrency trading platforms among Chinese expatriates and international Chinese communities."