China ‘all in’ on its own encryption brand

In reality, China is fully committed to digital currencies and blockchain technology, but only its brand that it can control, Katie Haun, general partner at Andreessen Horowitz, told CNBC on Thursday.

The Chinese government’s five-year plan drafted earlier this year first mentioned blockchain, which is the decentralized digital ledger technology that underpins cryptocurrencies like bitcoin.

“China is really in favor of cryptocurrencies. Make no mistake about it, “Haun said on” Squawk Box, “despite his latest crackdown on bitcoin mining and crypto services.

However, he emphasized that Chinese President Xi Jinping and other officials “fully agree with your crypto brand, which is a closed permission system. Something in disagreement with the open and decentralized protocols that we see as the future of the cryptography system ”.

China’s latest moves to restrict bitcoin mining in the country and pressure financial services companies not to provide cryptocurrency-related services have weighed on confidence in the cryptocurrency markets.

Bitcoin on Tuesday fell below $ 30,000 and, at one point even further, briefly lost all of its 2021 gains. The world’s largest cryptocurrency has recovered somewhat, trading at nearly $ 34,000 on Thursday.

This is not the first time that China has imposed restrictions on bitcoin, Haun noted. In 2017, the country moved to shut down local crypto exchanges, forcing them to move abroad. However, it did not end the influence of Chinese bitcoin traders.

China has also long been home to more than half of the world’s bitcoin mining capacity; So-called miners use high-powered computers to verify transactions through the blockchain network and are rewarded for their efforts with bitcoin.

The fact that China is now stepping up its crackdown, Haun said, ultimately reflects “the staying power of open decentralized cryptocurrencies like bitcoin because we’ve seen this happen before.”

“So, I think China is betting on cryptocurrencies in a big way and this is a great opportunity for Western societies, and the United States included, to support each other,” he said.

Haun’s appearance on CNBC came shortly after Andreessen Horowitz announced that he was launching a $ 2.2 billion cryptocurrency-focused fund.

The well-known Silicon Valley venture capital firm has been involved in the digital asset industry for years, debuting its first dedicated fund in 2018 even as bitcoin and other cryptocurrencies wilted during the so-called crypto winter. Haun, also a former Justice Department prosecutor, and Chris Dixon, who founded and ran two startups, are in charge of Andreessen Horowitz’s crypto group.

Andreessen Horowitz was also the largest outside investor in Coinbase at the time of the crypto exchange’s direct listing in April. Haun is a member of the board of Coinbase.

Bitcoin’s all-time high of nearly $ 65,000 came on the same day as Coinbase’s public debut. That day, April 14, was also when Coinbase hit its intraday high of $ 429.54 per share.

Both the cryptocurrency and Coinbase stocks are currently well below those levels. Coinbase was trading at around $ 228 a share on Thursday.

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