Government and supervision
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In 2016, blockchain technology was included in the 13th Five-Year Plan (2016 – 2020), which means that China became one of the first countries in the world to accept the technology in its official policy. It is worth noting that the government-supported blockchain technology application projects have been greatly favored compared to many decentralized blockchain projects. Perhaps it is too early to draw conclusions, but government support will promote the development of blockchain technology in the country.
However, Bitcoin has not been recognized by Chinese officials. Let's take a look at the following points:
December 2013: The People's Bank of China (PBoC) issued a “Notice on Preventing Bitcoin Financial Risks”, prohibiting banks from processing any cryptocurrency-related transactions. The government believes that the decentralization of Bitcoin has led to its lack of security.
December 2016: China has included blockchain technology in the “13th Five-Year Plan”.
September 2017: China bans all ICO activities. Soon after, during the government investigation of the encryption industry, the Chinese Bitcoin exchange stopped trading services. In the end, China's established exchange BTCC closed all domestic businesses. But the Chinese government and local companies such as Tencent and Alibaba are still optimistic about the huge potential of blockchain technology and focus on developing decentralized financial platforms.
January 2018: China bans P2P and over-the-counter markets. So far, Chinese national regulators have developed a long-term strategy to combat cryptocurrency-related activities in their economies by announcing a ban on foreign encryption-related platforms.
February 2018: Intercepting access to overseas digital currency trading platforms and ICO websites.
May 2018: Chinese President Xi Jinping praised the blockchain technology and called it "part of the technological revolution." The State Council of China urges local financial institutions and state-funded research centers to increase the development and commercialization of blockchain technology. The People's Bank of China has announced a blockchain system to combat fraud.
June 2018: CCTV, China's largest TV station, said that "the value of the blockchain is 10 times that of the Internet." In a one-hour video, Chinese government officials collaborated with international experts to introduce the concepts and potential of blockchain technology to the audience.
July 2018: The People's Bank of China said its actions against cryptocurrencies were a complete success. Announced by the People's Bank of China (PBoC) and reported by the national media, the current RMB accounted for less than 1% of all bitcoin transactions worldwide.
August 2018: The authorities warned against illegal fundraising activities under the guise of “cryptocurrency”. At least one major commercial district in Beijing is prohibited from engaging in the promotion of cryptocurrencies.
November 2018: Taiwan officially strengthens its anti-money laundering (AML) policy for encrypted exchanges, requiring exchanges to monitor and prevent the use of digital assets for any illegal transactions.
December 2018: The People's Bank of China (PBoC) emphasizes that the securitization token (STO) has no legitimacy in the country.
January 2019: China announced the ranking of major cryptocurrencies. Bitcoin (BTC) ranked 15th, while EOS ranked 1st and Ethereum ranked 2nd. China Information Industry Development Center (CCID) first announced the encryption ranking in May last year. In the ninth edition of the ranking index, EOS maintained its position as the first blockchain and has been in the first place since June 2018.
China is known for its many video card manufacturers and ASIC mining machines. As a result, Chinese miners can purchase the necessary mining equipment at a lower cost.
In addition, China has low electricity prices, and the Chinese government encourages lowering the cost of electricity for enterprises. This is why China has the largest mining center in the world.
The cryptocurrency mines are distributed throughout the country. Among them, the most well-known are Sichuan and Liaoning (the three-storey mine in Dalian accounts for more than 3% of Bitcoin's entire network), Xinjiang, Inner Mongolia and Yunnan.
Business and research
China is one of the most technologically advanced countries in the world. China tends to be the leader in trying new concepts, such as scan code payments. Unsurprisingly, China is also actively exploring blockchain technology:
In 2017, companies in China submitted a large number of patents related to blockchains worldwide. Since 2016, the number of patents in China's blockchain has increased nearly fourfold.
China's e-commerce giant Alibaba has the world's largest blockchain patent (estimated 49), mainly for applications, and has been applied in the fields of healthcare, public welfare and supply chain. However, Ma Yun, the founder of Alibaba, still believes that Bitcoin is a "bubble." Obviously, like the Chinese government, Alibaba pays more attention to the blockchain technology itself than to the cryptocurrency.
Another company, Ma Yun Investment, plans to use blockchain technology to reduce the risks and costs of health insurance. According to reports, Zhongan Technology is currently working with the Shanghai Insurance Regulatory Authority to establish a blockchain reinsurance platform.
Chinese search giant Baidu plans to launch a blockchain game called Degree Universe. This will be Baidu's second development of the blockchain game application. In February last year, Baidu launched the dog chain game "Leitz Dog" based on the blockchain. In addition, Baidu recently announced another blockchain-based product: the "superchain" protocol.
Other key players in China include the Wanxiang Blockchain Lab (co-founded by Wanxiang Holdings and Vitalik Buterin) and Jingdong, China's largest online retailer, which recently announced the first four of its Al Catapult blockchain incubations. Startups.
In late September 2018, the first hotel in China to accept Ethereum (ETH) as a payment method was opened in the Siguniang Mountain National Scenic Area.
On October 1, China's oldest scientific publication "Beijing Science and Technology News" (BSTR) announced that it will accept Bitcoin as its subscription payment method from the beginning of 2019.
In early January 2019, the China Cyberspace Authority (CAC) introduced new regulations for blockchain companies operating in the country. The standard requires blockchain startups to allow Chinese authorities to access stored data and introduce registration procedures that require a user ID or mobile number. In addition, they are obliged to supervise the content and review information prohibited by current Chinese laws.
to sum up
Interest in cryptocurrencies has been growing over the past few years. According to reports, the most preferred asset class for Chinese investors is bitcoin and real estate. Real estate is a safe asset, but why is Bitcoin? Unlike other asset classes, Bitcoin has nothing to do with the Chinese economy and therefore can hedge investment risks.
Although China's attitude toward cryptocurrency transactions is unclear, it is highly encouraged to explore blockchain technology. It is safe to say that in the near future China will achieve some important breakthroughs based on blockchain. (OK Blockchain Business School)