In Hong Kong, some local citizens are turning to crypto assets and encrypted communication to resist financial surveillance and internet censorship.
Hong Kong’s national security law, enacted on June 30, aims to quell opposition to China’s ruling Communist Party. The law has raised widespread fears of a clampdown on free speech and tighter control over the city’s financial system. Under the new law, the Hong Kong government will be able to freeze and confiscate assets from people or organizations that are suspected of being involved in national security crimes.
Data suggests people in Hong Kong are increasingly using stablecoins, which are digital tokens whose value is pegged to fiat currencies, as a way of keeping their assets independent of a banking system that is subject to government control.
As the chart above demonstrates, trading volume between Hong Kong dollars and the U.S.-dollar pegged stablecoin USDT saw a surge in early June on the fiat-crypto trading platform TideBit. The surge followed the decision to strengthen Hong Kong’s national security law, which was unveiled by Chinese legislators during the Two Sessions, the largest annual political gathering in mainland China. The second trading surge on the exchange followed the enactment of the new law on June 30.