China at Risk of Losing out on Bitcoin Revolution, Says State-owned Newspaper
Around the world, cryptocurrencies are fast threading along a relatively positive path towards acceptance, as governments and regulators are testing, deploying, and evaluating the integration of blockchain and cryptocurrency into their existing economic systems.
Country’s Redundant Crypto Laws
The world’s second-largest economy placed a blanket ban on cryptocurrencies in September 2017, igniting a massive sell-off in the cryptocurrency market presumably from Chinese investors. However, it is increasingly believed that a fundamental approach towards the technology will be the ultimate solution, eliminating the fear of putting the existing financial system in jeopardy.
As stated in the report, unconfirmed rumors started circulating in China after several central bank executives visited the former offices of Huobi, the world’s second largest cryptocurrency exchange by traded volume, in an effort to learn about the technology and possibly relaunch cryptocurrency businesses. However, Huobi’s CFO Zhu Jiawei dismissed the rumors shortly after.
While China is shunning businesses related to cryptocurrencies, it is creating an optimal environment for blockchain development, setting up a $1.6 billion “blockchain park” in the city of Hangzhou with the purpose of incubating blockchain projects and startups.
Hangzhou, China. The city is home to a $1.6 billion blockchain park
(Source: Hutong School)
The country undeniably embraces technology, and while cryptocurrencies are an innovative method of peer-to-peer payments, the asset class displays a wildly volatile nature, leading many to label it a “bubble.” From this perspective, it made good sense at the time to clamp down on cryptocurrencies in the country, to ensure the country’s economic stability.
However, Global Times stated that China could be left behind in the “digital currency revolution,” as countries around the world swiftly introduce regulations and reforms on digital assets and related businesses. The report concluded:
“It’s time for China to lay the regulatory groundwork for its rise as a future digital currency trendsetter.”
China’s Blockchain Push
Speaking at the 19th edition of the Chinese Academy of Sciences’ annual conference on May 28, 2018, President Xi said that breakthroughs like blockchain are “constantly coming,” and China remains fully committed to exploring state-run blockchain projects.
Interestingly, the Eastern superpower is reportedly developing and unveiling “National Blockchain Standards” in 2019. Previously in May 2018, China also issued its own ranking of cryptocurrencies, placing smart-contract framework Ethereum at rank one and the pioneer cryptocurrency bitcoin at 13.
Despite openly shunning cryptocurrencies, It must be noted that China is home to the world’s largest bitcoin mining organization, Bitmain, and also owns the highest number of blockchain patents. Xi’s speech explained:
“If China is to flourish and rejuvenate, it must vigorously develop science and technology and strive to become the world’s major scientific center and innovative highland.”
Every new blockchain and cryptocurrency development in China begs the question: what is the country’s ulterior motive with the technology?