Most cryptocurrencies, including bitcoin, operate under a public computer network that is designed to exist outside the control of a central authority, becoming an alternative payment system to traditional banking.
On Monday, a bitcoin advertisement spanned the entire front page of Apple Daily, a major Chinese-language newspaper in Hong Kong. The digital coin also recently featured in India’s The Economic Times, Britain’s Financial Times, as well as in televised adverts on CNBC, MSNBC and Fox Business in the US.
The bitcoin ad in Apple Daily was in Chinese and English. The first English sentence featured across the top section of the page says, “Bitcoin will never ditch you”, accompanied by an artistic signature representation of Satoshi Nakamoto, the pseudonym behind bitcoin’s creation. Translated, the first Chinese sentence reads: “Banks, it’s not you ditching me today. It’s me ditching you.”
The advert continues in Chinese at the bottom of the page, saying, “Bitcoin is a decentralised, digital currency invented by Satoshi Nakamoto after the financial crisis. On January 3, 2009, bitcoin created the first blockchain, the genesis block. Even though a lot of people remain dismissive of it, it has proven its value time and time again.”
“Making a transaction on the bitcoin network does not require you to pass through a bank, electronic payment platform or a third-party entity. Anybody can make a transaction with it, without any interference,” the advert says. “No matter why you may be prohibited from using banking services, or wish to enjoy finances that are not under the surveillance or restrictions of a third party, we welcome you to join our big, bitcoin family.”
The bitcoin advert in Apple Daily is a sharp contrast with the charge that China is increasingly using its strength to influence the behaviour of global financial institutions in pro-democracy media critical of Beijing.
In 2014, Mark Simon, an executive with Next Media, the publisher of Apple Daily, said that HSBC and Standard Chartered had ended their long-time advertising relationships with Apple Daily after being instructed to by the Chinese government.
In the wake of Beijing’s implementation of the national security law for Hong Kong, local tycoon Jimmy Lai Chee-ying, the founder of Apple Daily, was arrested earlier this month on suspicion of violating the controversial legislation. Lai was released on bail within 48 hours. There was also an arrest warrant out for Simon, an American citizen who was not in Hong Kong at the time.
On August 7, the US Department of the Treasury sanctioned 11 officials from Hong Kong and the mainland for undermining Hong Kong’s autonomy and restricting the freedom of expression or assembly of residents in the city.
Under the sanctions, Hong Kong Chief Executive Carrie Lam Cheng Yuet-ngor and 10 other blacklisted individuals are prohibited from using overseas bank accounts and from investing in US-based assets. They are also blocked from doing business with Americans and US companies.
US Secretary of State Mike Pompeo alleged on Wednesday that HSBC had maintained banking relationships with individuals facing American sanctions while cutting off access to the Hong Kong executives of Next Digital.
The top American diplomat said it was another example of the “coercive bullying tactics” used by the Chinese Communist Party against British companies. HSBC is based in London but generates most of its profit in Asia.
On Thursday, the US imposed sanctions on dozens of Chinese companies for helping Beijing advance its territorial claims in the South China Sea – the first punitive action of its kind over the disputed waters.
One commenter on Apple Daily’s Facebook page described the bitcoin ad as “Wonderful! A Hong Kong-flavoured advertisement! … Only Hong Kong would do this.”
Others agreed that Hong Kong’s banking sector is caught in the crosshairs of the two superpowers.
“Confidence is super low in depositing money with Hong Kong banks,” another comment read.
“The world is beginning to feel worried and dissatisfied with a financial system in which national governments control the management of banks and set asset currency prices,” a third commenter said.
Supporters of cryptocurrencies, including bitcoin, say one of the benefits of using a third currency to pay for goods is that it is not subject to pressure from government policies on either end of the transaction, unlike the way US dollars or the yuan would be in global trading markets.
But critics say cryptocurrencies also support illegal activities, including terrorism, and lead to volatile trading prices.
A recent report by New York-based blockchain analytic company, Chainalysis, said East Asia has become the world’s largest cryptocurrency market, accounting for 31 per cent of all cryptocurrency transacted in the past year amid escalating tensions in US-China relations.
More than US$50 billion in cryptocurrency assets have been moved from China-based addresses to other regions over the past year – a possible indication that some Chinese people are evading government rules that limit how much capital they are allowed to transfer out of the nation, Chainalysis said.