Owing to the lack of regulation and restriction in the United Kingdom, fraudulent companies have been flocking to the country.
The Chinese government and national authority might have a strong aversion to Bitcoin and the use of other decentralised cryptocurrencies, but blockchain technology is ever increasing in the country.
The Cyberspace Administration of China (CAC) has just announced that it will be launching an initiative to look at how it can implement and leverage blockchain development and innovation across 15 zones and 164 entities in the country. The project will be developed and managed in-house and calls for large-scale use of the same technology that Bitcoin is built on. According to the CAC, the initiative will see the implementation of blockchain tech across industries including business sectors and government organisations in the country.
Other Chinese government authorities will be involved in drawing up and directing the regulatory infrastructure to ensure the use of the technology is collaborative and supports the nation’s economy and well-being. According to the announcement, the aim of the project is to “promote the intensive and balanced layout of blockchain technology infrastructure in the region, form a large-scale production-level cross-chain data exchange support capability, and promote the formation of a multi-party collaborative blockchain industry ecology.”
Why is China looking to blockchain technology?
According to the announcement, the project to leverage blockchain technology is in place to increase efficiency across sectors and to build an affordable collaborative system that encourages secure data sharing. As blockchain is inherently built to share data (albeit initially anonymously), it is well-suited to offer businesses and governments a secure system that is consistently up to date. As per the notice:
“Provincial network information offices and industry supervisors and regulatory departments in all regions should pay attention to the collaborative promotion of pilot construction, and give full play to the role of blockchain in promoting data sharing, optimizing business processes, reducing operating costs, improving collaborative efficiency, and building a credible system.”
CAC’s notice offered a list of cities and businesses and other players in certain sectors that will be involved in the project’s pilot:
According to the notice, the pilot will look to see how feasible blockchain technology will be to use in fields that deal with data sharing, supply and logistics, legal documents, financial systems, education, healthcare and risk control management.
The pilot will be tracked and monitored daily by the “competent national industry supervision department” in order to establish whether the project is working and to get a consistent evaluation of the application of the technology. This department will also adjust where needs are, according to the notice.
China’s stance on cryptocurrency and digital assets
The Chinese government is actively against Bitcoin and the mining and use of cryptocurrencies in the country. There has been a blanket ban on cryptocurrencies, which was reinforced and strengthened last year. This meant many miners in the region had to pack up or leave the country to continue. The trading of unregulated cryptocurrencies in the country is also banned.
Despite this, the government has shown no aversion to other blockchain-based digital assets.
In addition to the launch of this blockchain initiative, the government has also shown interest in non-fungible tokens (NFTs) based on the blockchain and the ecosystems that are forming around the tech. Recently, the Blockchain-based Service Network (BSN) was alleged to be working on a pilot to support people who are building NFT-related platforms and applications. While this project makes use of cryptocurrency-associated technology, it will aim to launch the platforms that will rely on fiat for NFT sales and trading – rather than cryptocurrency native tokens commonly seen across the market overall.