After years of resistance — and even outright hostility — to cryptocurrency investment and development, China’s government abruptly changed course earlier this month. The county’s contentious relationship with cryptocurrency dates back to at least March of 2014, when Chinese banks were banned from providing services to bitcoin-related businesses. Since then, Chinese lawmakers, regulators, and the People’s Bank of China (PBoC) have increasingly cracked down on most cryptocurrency-related business in the country. (Ironically, China is also home to both the largest supplier of cryptocurrency mining hardware — Bitmain, headquartered in Beijing — and a thriving bitcoin mining community based largely in the remote parts of the Sichuan province.)
While China has been quietly developing new regulatory frameworks for both blockchain and cryptocurrency — including a planned “digital yuan” currency — for several years, the country’s sudden shift in policy caught many long-time observers by surprise. In this post, we’re taking a look at five recent headlines about China’s changing position on blockchain and cryptocurrency.
1. President Xi wants to “seize the opportunity” with blockchain: Speaking at the 18th meeting of the Political Bureau of the Central Committee last week, President Xi Jinping outlined his administration’s new approach to crypto and blockchain. “We must take the blockchain as an important breakthrough for independent innovation of core technologies,” Xi reportedly told committee members, adding that the country would be substantially increasing investment in blockchain technology in the near future.
2. China’s Congress reforms cryptography law: One day after President Xi’s announcement, the 13th National People’s Congress passed a new cryptography law intended to modernize the country’s stance on “cryptography technologies.” The new law will make it easier for Chinese commercial and industrial interests to incorporate blockchain technology into their operations, and encourage research and investment in cryptography-based innovations.
3. Over 500 new blockchain projects registered in China: Earlier this week, the Cyberspace Administration of China published a list of 506 “distributed ledger technology” projects currently registered with the organization. The list includes financial technology projects supported by China’s major banks, cryptocurrency-like payment platforms, blockchain-driven cloud services, and decentralized applications (DApps).
4. People’s Bank of China calls for blockchain banking: Speaking at a forum in Shanghai last week, PBoC technology chief Li Wei called for China’s banks to “step up” their adoption of blockchain technology. The PBoC currently has at least one cryptocurrency-like project in the works, with some suggesting that the token could launch as early as 2020.
5. China’s Communist Party unveils party loyalty blockchain: Shortly after President Xi’s speech last week, China’s Communist Party (CPC) launched a decentralized app called the “Original Intentions Onchain” that enables CPC members to pledge their loyalty to the party using a public blockchain.