thecryptobasic.com
Crypto assets such as VET and CFX, which boast partnerships with Chinese companies, could see performance improvements as China cuts the stamp duty rate.
The Chinese Ministry of Finance recently reduced stamp duty on trades involving stock from 0.1% to 0.05%, effective today.
This decision is part of a series of measures to entice investors to engage with the Chinese stock markets. The impact of this move has prompted speculation among experts, including crypto influencer and analyst Şirin Baba.
With the stamp duty cut set to revitalize capital markets and boost investor confidence, Şirin Baba believes this development could have broader implications for the cryptocurrency market.
Pazartesi gününden itibaren Çin Maliye Bakanlığı hisse senedi alımlarında damga vergisini %0,1’den 0,05’e düşürecek.
Bu haberle beraber çin şirketleriyle ortaklığı bulunan bazı coinleri yakından takip etmekte fayda var. Geçici bir artış görebiliriz.$CFX – XiaohongShu (çin…
— Şirin Baba (@smurfypappa) August 27, 2023
Particularly, he suggests that assets with existing partnerships with Chinese companies could experience a positive shift. Şirin Baba especially calls attention to four notable crypto assets:
Conflux (CFX)
In January, Conflux secured its place as the chosen blockchain solution for XiaohongShu, often called the “Chinese Instagram.” Conflux also partnered with China Telecom in February.
Phoenix Global (PHB)
Through partnerships with WeChat and Tencent, Phoenix Global has integrated itself within the WeChat ecosystem and leverages Tencent cloud services.
COMBO (COMBO)
With a recent partnership with Alibaba Cloud, COMBO has solidified its connection to one of China’s tech giants. As Alibaba remains an influential player in the Chinese market, COMBO could see a boost from the stamp duty reduction.
VeChain (VET)
VeChain established itself within the retail landscape in June 2019 through a partnership with Walmart China. This association could contribute to a potential price increase, as Walmart China remains a prominent Chinese firm.
China’s Move to Entice Investors
China’s broader intention to revive its capital markets and increase investors’ confidence supports the idea that these crypto assets could experience short-term growth. The Chinese stock market is already seeing an upsurge.
The stamp duty reduction coincides with the Chinese Securities Regulatory Commission’s decision to limit IPOs. According to a report citing Bloomberg, this move also aims to stabilize the market.
The last reduction in stamp duty occurred in April 2008, during which the authorities decreased it to 0.1% to bolster market support.
In addition to reducing stamp duty, Chinese regulators have undertaken other initiatives to strengthen the stock market. These include reductions in handling fees on stock transactions and the encouragement of share buybacks by companies.
It is important to note that while this move has generated optimism, it also comes against a backdrop of challenging circumstances, including consecutive sessions of net stock sales by foreign investors.
Nonetheless, the Chinese authorities’ encouragement of stock investments and other supportive measures could counterbalance these challenges.