In recent months, the Chinese government has initiated a crackdown targeting cryptocurrency miners and exchanges. Authorities across the country are stopping mining operations in a country that accounts for 65% of bitcoin’s hashrate, going by an estimate by Cambridge university.
The country is also asking crypto exchanges such as Huobi to stop some of their activities, even as its Cental Bank races to operationalize a Central Bank Digital Currency (CBDC).
Despite this hawkish stance towards crypto, a recent policy document seen by South China Morning Post reaffirms China’s intention to be a leader in blockchain technology.
In the document released by the Ministry of Industry and Information Technology, the country plans to establish an “advanced blockchain industrial system.”
As part of this initiative, China plans to “establish industrial standards, tax incentives and intellectual property protections to support its goal of being a world leader by 2025.”
This direction backs President Xi Jinping’s endorsement of blockchain technology in late 2019.
The endorsement sparked blockchain innovation in:
- Supply chains
- Global shipping
Today, major tech companies and public institutions in China have already created several blockchain-based applications. These include:
- Ant Group, the leading fintech company
- Baidu, the dominant search service has several applications, including one that analyzes electronic evidence for an internet court
- Banks, such as the Industrial and Commercial Bank of China, and China Commercial bank also have applications, including one that helps local banks to facilitate loans
In 2019, a national blockchain network, where innovators can build their applications, was introduced. Referred to as blockchain-based Service Network (BSN), it can be compared to an operating system for blockchain applications.
Although most of these projects are not fully commercialized, China’s blockchain industry is growing at 54.6% annually, faster than the global average of 48%.
The policy document also raises the potential real economic impact that blockchain technology can have in supply chain management, product traceability, and data sharing.
For public services, China’s government points out identity documentation, property registration, education, and health-care data management as important use-cases for blockchain technology.
The document also outlines cooperation along the Belt and Road Initiative.
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