China, which used to be a country criticized by the international community for prohibiting the trading of cryptocurrency, is now one of the leaders in developing the technology which backs cryptocurrency. Ever since China has aimed at embracing modern technology to enhance the lives of its citizens, like making available mobile payment methods, fast railways and automatically driven vehicles. Hence owing to the potential of blockchain technology, it did not take much time for the Chinese government to start working on the technology and adopt it on a national level. Evidence even suggests that China is vying to become a nation powered by the blockchain technology.
Recent years have showcased numerous blockchain related regulations and policies that were introduced throughout China. Blockchain development was incorporated in the country’s national plan and even supporting activities such as funds were allocated. Generally speaking the blockchain technology has received a lot of attention from China.
As reported by a local Chinese finance publication Securities Daily on December 7, three Chinese cities Beijing, Shanghai and Guangzhou, collectively known as BeiShanGuang, have become the hottest areas when it comes to relevant blockchain legislation and policies.
Securities Daily carried out an analysis of all blockchain related policies implemented in China during the past years and presented the findings that there were 32 blockchain related policies introduced in the country. Eleven of these projects were concentrated in the three cities Beijing, Guangzhou and Shanghai. The Chinese securities newspaper presented a publication which said,
Blockchain technology [is aimed] to serve the real economy, focusing on the balance between innovation, regulation and security, and clarifying the bottom line of financial stability and information security.
However when it comes to cryptocurrencies and blockchain China has kept a split policy, where it promotes and incorporates blockchain technology into its systems and on the other hand bans cryptocurrencies. The Chinese President Xi Jinping has even publicly stated that the blockchain technology is a priority of the 21st century.
In November the Chinese Ministry of Industry and Information Technology (MIIT) published a document the contents of which called for accelerated developments of standards for the effective application of blockchain systems across multiple domestic industries.
Moreover last month a new association was formed in Guangzhou city of China, comprising of 54 various companies, which was aimed at the promotion and development of blockchain technology in China.
China has had a very positive attitude in dealing with Blockchain technology. It is in fact one of the first countries in the world which mentioned the blockchain technology in a state-level policy. During the year 2016, China added Blockchain into the thirteenth Five-Year Plan, which was a blueprint for national development from 2016 to 2020.
That being said the Chinese government has allegedly censored some content related to cryptocurrencies. China is one of the major contributors in the blockchain market and hosts a significant number of Bitcoin miners, in 2017 an estimated fifty to seventy percent of Bitcoin mining took place in China. As of now owing to the regulations enforced by the Chinese government cryptocurrency trading is banned in the country. After the crackdown , which occurred last fall, on local exchanges and Initial Coin Offerings (ICOs), Chinese citizens can possess cryptocurrency, but exchanging it for fiat money is illegal.
Various institutions including The People’s Bank of China (PBoC), the Chinese central bank, has given out multiple warnings against cryptocurrencies and has even dubbed them as “bubbles” in financing and investment. The Beijing Municipal Bureau of Financial Work has been reminding the public that even Security Token Offerings (STOs) were also considered illegal in the jurisdiction.
Regardless of a series of enthusiastic promotions for blockchain business, several companies are laying low when it comes to getting involved in products related to blockchain due to uncertain policies. Hence business operators must be aware of whether certain blockchain products are completely in line with the government’s rules or not, even if there are no cryptocurrencies involved.