China, a country which had earlier prohibited trading of cryptocurrency and had to face the criticism by international crypto-community, is now one of the leaders in developing the cryptocurrency technology.
China is aiming to develop modern technology in blockchain to compete and stay ahead in the global crypto market. In recent years, China has imposed various blockchain related policies and regulations.
According to the report by a Securities Daily (a local finance publication), China has introduced 32 policies in total related to the blockchain. The publication noted,
“Blockchain technology [aims] to serve the real economy, focusing on the balance between innovation, regulation and security, and clarifying the bottom line of financial stability and informational security.”
The Securities Daily analyzed that out of 32 policies, 11 are concentrated on three major cities Beijing, Shanghai, and Guangzhou. China has split policy when it comes to blockchain and cryptocurrency; it promotes blockchain and incorporates its technology, and on the other hand, it imposes the ban on cryptocurrencies.
The President of China, Xi Jinping has publicly remarked that the blockchain technology is the topmost priority of the 21st century. In November the Chinese Ministry of Industry and Information Technology (MIIT) published a document which concentrated on practical application and development of blockchain technology across multiple industries.
Last month in Guangzhou city a new association was formed, which had 54 various companies and was aimed to develop and promote blockchain technology in China.
China is exhibiting a positive attitude in dealing with blockchain technology, and it is one of the first countries in the world to have blockchain technology in a state-level policy. In 2016, China added blockchain in the Thirteenth Five-Year Plan.
The Chinese government is alleged to censor some content related to cryptocurrency. For example, the country’s state-run TV channel aired a special ‘Mastering Bitcoin’ a book by Andreas Antonopoulos, but the title was changed to ‘Blockchain: The Road to Digitalization of Assets.’
China is one of the significant contributors in blockchain technology and also hosts a considerable number of Bitcoin miners, in 2017 it is estimated that nearly 50 to 70 % Bitcoin mining took place in China.
The cryptocurrency trading is banned in China owing to the regulations enforced by the government. The government cracked down on local exchanges and Initial Coin Offerings (ICOs) last year. The citizens of China can possess cryptocurrency but cannot trade or exchange for fiat money as it is considered illegal.
The Beijing Municipal Bureau of Financial Work has been alerting the public that Security Token Offerings (STOs) are also considered illegal in the jurisdiction.
Many other institutions including The People’s Bank of China (PBoC) and the Chinese Central Bank has issued the public notice against cryptocurrencies and has even stated that they are the ‘bubbles’ in finance and investment.
Hence the business operators must be aware of whether certain blockchain products are entirely in line with the government’s regulations or not, even if there are no cryptocurrencies involved.
Will China’s Blockchain Policy Development and regulations hamper the growth of the cryptocurrency market in other countries? Share your thoughts in the comments.