China's Potential Bitcoin Reserves: Will It Follow the U.S. Playbook?

As the United States takes its first official steps toward building a Strategic Bitcoin Reserve, the world is left wondering if China will follow suit, especially given its significant Bitcoin holdings. Speculation is growing that China could leverage its seized Bitcoin from the PlusToken Ponzi scheme to create a national Bitcoin reserve that rivals the U.S.

On March 7, U.S. President Donald Trump signed an executive order establishing a Strategic Bitcoin Reserve and a Digital Asset Stockpile. The reserve will initially be funded by Bitcoin and other digital assets seized in government criminal cases. As the U.S. positions itself as a key player in the global Bitcoin ecosystem, China may be forced to respond, especially if it wishes to remain competitive on the world stage.

China’s Bitcoin Holdings: How Much Does the Country Own?

China's official stance on Bitcoin remains shrouded in mystery. While the country has never officially disclosed the size of its Bitcoin holdings, it is widely believed that it controls a substantial amount. The most notable stash of Bitcoin in China’s possession stems from its seizure of nearly 195,000 BTC from the PlusToken Ponzi scheme in 2020.

This significant seizure was ruled by the Yancheng Intermediate People’s Court, which directed that the confiscated Bitcoin’s profits be forfeited to the national treasury. While some speculators, such as Ki Young Ju, CEO of CryptoQuant, have suggested that China might have already sold its Bitcoin holdings, this remains unconfirmed. Ju speculated that China's reluctance to hold "censorship-resistant money" like Bitcoin might mean it liquidated the assets. However, no official information has been released on whether the country has sold its Bitcoin or retained it for future use.

If China still holds this Bitcoin, it could potentially create a reserve that rivals the U.S. The U.S. government currently holds 198,109 BTC, valued at more than $17 billion, and has expressed its intention to treat the Bitcoin as a long-term store of value, with no plans to sell it. The U.S. has also outlined “budget-neutral strategies” to purchase more Bitcoin in the future. If China adopts a similar strategy, it could become one of the world’s largest holders of Bitcoin.

Is China Preparing a Response to the U.S. Bitcoin Reserve?

The question of whether China will adopt a Bitcoin reserve strategy remains unanswered, but reports suggest that the country may be actively considering such a move. On March 3, David Bailey, a well-known Bitcoin advocate, suggested that China has been discussing Bitcoin strategy behind closed doors since the 2024 U.S. elections, although no official confirmation has been made. Bailey hinted that the Chinese government might be preparing its own response to Trump’s executive order, signaling that China could follow the U.S.’s lead in establishing a national Bitcoin reserve.

If China were to create its own reserve, it would likely use its seized Bitcoin to help fund it. This move could establish China as one of the top players in the growing trend of nation-state Bitcoin adoption, positioning the country to have a prominent role in the global digital asset ecosystem.

The U.S. Adoption of Bitcoin Sparks a Global Race

The U.S. government’s creation of a Strategic Bitcoin Reserve has sparked interest worldwide, with some crypto industry leaders seeing it as the beginning of a nation-state Bitcoin race. Samson Mow, CEO of Jan3, a company focused on Bitcoin adoption, believes that the U.S.’s move will significantly influence the future of Bitcoin within national economies. Mow emphasized that the U.S. reserve would have far-reaching implications, even if it did not immediately purchase new Bitcoin.

Mow suggested that the U.S. could explore budget-neutral ways to acquire Bitcoin, such as issuing bonds or liquidating assets like gold. Furthermore, he argued that China could take the lead in this race, especially if it retains the 195,000 BTC seized from PlusToken. Mow pointed out that while the U.S. holds approximately 112,000 BTC due to a portion of its reserves being designated for return to the Bitfinex crypto exchange, China’s current holdings put it in a strong position to lead the world in Bitcoin reserves.

Could China’s Bitcoin Reserve Be a Catalyst for Further Adoption?

As the U.S. and other countries like El Salvador continue to explore Bitcoin adoption, China’s actions could be a significant factor in the global transition toward digital assets. While China's central government has maintained a skeptical stance toward Bitcoin in the past, its moves toward establishing a national reserve could have wide-reaching effects, particularly if it helps bolster the global liquidity of Bitcoin.

In Hong Kong, lawmakers have already started to explore the potential for Bitcoin adoption within China’s "one country, two systems" framework. On December 30, Wu Jiexhuang, a member of Hong Kong’s Legislative Council, suggested that Hong Kong could study the impact of spot Bitcoin exchange-traded funds (ETFs) in the U.S. This exploration could pave the way for broader Bitcoin adoption across China, especially in areas like financial markets and investment vehicles.

Looking Ahead: Will China’s Bitcoin Strategy Emerge?

As the U.S. Strategic Bitcoin Reserve takes shape, the focus is shifting to China’s potential move in response. Whether China will follow the U.S. playbook by creating a national Bitcoin reserve remains unclear, but its substantial seized holdings of Bitcoin make it a key player in this growing global trend. The potential for China to build its own Bitcoin reserve raises questions about the future of Bitcoin adoption and competition among nation-states for digital asset dominance.

While Beijing has remained silent on its exact plans, the crypto community is closely watching any developments that could signal China’s next move in the evolving Bitcoin landscape. Should China decide to establish its own Bitcoin reserve, it could reshape the future of global financial systems and solidify Bitcoin’s place as a mainstream store of value.