02-12-2026 
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In lengthy testimony before the Senate Banking Committee, U.S. Treasury Secretary Scott Bessent warned that China may be looking to use digital assets to challenge U.S. financial leadership, while taking aim at ‘nihilist’ digital asset companies that are resisting U.S. efforts to legislate the industry.
Bessent was appearing before the Senate Banking Committee to give testimony on the Financial Stability Oversight Council’s Annual Report to Congress.
In response to a question from Wyoming Senator Cynthia Lummis about whether China is looking to build an ‘alternative to American financial leadership,’ the Treasury Secretary said:
“We don’t know that for sure. They have a very large sandbox in Hong Kong, and the Hong Kong Monetary Authority is actively traveling the world, looking at different mechanisms,” he answered.
“So I would not be surprised.”
While the United States has pushed forward in its embrace of digital assets with a conscious aim to be the world-leading jurisdiction for the industry, China’s intentions have been somewhat more opaque. China has put bans on digital asset activity in place since as early as 2013, but the true picture isn’t so simple, and Bessent referred to ‘rumours of Chinese digital assets’ in his testimony Thursday.
Despite a ban on the mainland, however, Hong Kong has long been perceived as a de facto regulatory sandbox for China’s digital asset exploration, with Hong Kong taking numerous steps to grow its digital asset industry, including introducing stablecoin licensing laws in 2025, ostensibly with Beijing’s assent.Bessent also focused on digital asset companies that have pushed back on the in-progress market structure bill, which seeks to formalize the rules of the road for digital asset markets.
“There seems to be a nihilist group in the industry who prefers no regulation over this very good regulation,” he testified.
The remark drew agreement from Democratic Senator Mark Warner, who is one of the legislators working on the bill: “Amen, brother.”
Bessent’s remarks seem at least partly aimed specifically at Coinbase (NASDAQ: COIN) and its CEO, Brian Armstrong. In January, Coinbase publicly withdrew its support for the market structure bill, with Armstrong tweeting that it had ‘too many issues’ and that he’d ‘rather have no bill than a bad bill.’
Concerns identified by Armstrong include that the bill amounts to a ban on tokenized equities, that it would ‘give the government unlimited access to your financial records and removing your right to privacy’ and would ‘allow banks to ban their competition.’
Watch Bessent’s full testimony here.
Watch: What’s ahead for crypto regulation? Highlights from Blockchain Futurist Conference 2025
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