- Could Hong Kong’s new security law giving China full control over the territory’s judicial system lead to fresh demand for Bitcoin?
Hong Kong’s worst nightmares have become a reality with the passage of the new Hong Kong ‘security law’, which gives China full authority over the territory’s judicial system, effectively ending its sovereignty. This is terrible news for the Special Administrative Region, but it is notable that this could cause a surge in Bitcoin demand as Hong Kong residents rush to get their funds out of the region.
As discussed in a previous article on BitcoinNews.com, riots have been going on in Hong Kong for many months over the proposed security law, and the exodus of money from the region has already been causing significant surges in Bitcoin demand.
Essentially, Bitcoin is one of the best mechanisms to get funds out of Hong Kong. This is because Bitcoin can be sent anywhere in the world instantly and securely, and also if proper steps are taken Bitcoin can be anonymous. Once the Bitcoin is sent somewhere else in the world, it can be converted into any fiat currency, and deposited in pretty much any bank.
Also, residents who are trying to safeguard their money can simply consolidate their funds into Bitcoin and keep their wallet extremely secure and hidden. Indeed, although residents cannot leave Hong Kong with big suitcases of cash, it would be simple to conceal a Bitcoin wallet even if it had billions of US dollars on it.
Now that the Hong Kong security law is finally here, there is likely a last-minute rush to get funds out of there before it is too late. Basically, residents fear that they will be arrested by China and then have no legal protections, and indeed hundreds of people in Hong Kong are already being arrested. The wealthy are especially in fear, because China could at this point arrested wealthy citizens and take all of their assets.
Indeed, the Hong Kong security law allows for its residents to be sent to jails in mainland China, where there will be closed trials, meaning there will potentially be no legitimate legal process for people facing this sort of situation, and penalties go up to life in prison.
Also, it has become a crime to be in support of Hong Kong independence or to say or do anything in opposition to the Communist Party of China. This is a hard pill to swallow for Hong Kong residents, who are used to democracy and freedom, and for that reason alone they are trying to flee the region.
Bitcoin has indeed been showing signs of surging since the passage of the Hong Kong security law, and has risen from lows of USD 8,900 a few days ago to over USD 9,200, and this may only be the beginning as residents scramble to survive and protect their funds.
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