May 28, 2023

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

The Chinese government’s five-year plan drawn up earlier this year first mentioned blockchain, the decentralized digital ledger technology that underpins cryptocurrencies like Bitcoin.

“China is actually all about crypto. Make no mistake, “said Haun in” Squawk Box “, despite his recent crackdown on Bitcoin mining and crypto services.

However, she stressed that Chinese President Xi Jinping and other officials “are all betting on their crypto brand, which is a closed permission system. Something at odds with the open, decentralized protocols that we see as the future of the cryptosystem. “

China’s recent measures to restrict bitcoin mining in the country and put pressure on financial services companies not to offer crypto-related services have weighed on sentiment in crypto markets.

Bitcoin fell below $ 30,000 on Tuesday – and later briefly lost all of its profits in 2021. The world’s largest cryptocurrency has rebounded somewhat, trading at nearly $ 34,000 on Thursday.

Read more about cryptocurrencies from CNBC Pro

This isn’t the first time China has imposed restrictions on Bitcoin, Haun noted. In 2017, the country shut down local crypto exchanges, forcing them to relocate overseas. However, it didn’t put an end to 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-performance computers to verify transactions in the entire blockchain network and are rewarded with Bitcoin for their efforts.

According to Haun, the fact that China is now tightening its crackdown reflects “the stamina of open decentralized cryptocurrencies like Bitcoin, because we’ve seen this before”.

“I think China is going into crypto on a massive scale and this is a great opportunity for western societies and the US to get involved,” she said.

Haun’s appearance at CNBC came shortly after Andreessen Horowitz announced that it would launch a $ 2.2 billion cryptocurrency fund.

The well-known venture capital firm from Silicon Valley has been active in the digital asset industry for years and launched its first dedicated fund in 2018 when Bitcoin and other cryptocurrencies withered in the so-called crypto winter. Haun, also a former Justice Department attorney, and Chris Dixon, who founded and ran two startups, are responsible for Andreessen Horowitz’s crypto group.

Andreessen Horowitz was also the largest external investor in Coinbase at the time the crypto exchange was directly listed in April. Haun is a board member of Coinbase.

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

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