Huobi Group--China’s crypto conglomerate that invests in digital assets including blockchain incubators, mining pools and research--has announced plans to invest $100 million to build the country's first public blockchain, the Huobi Chain.
Interestingly, Huobi has already raised $300 million for the project through token sales with the extra funds to be pumped into the company's $1-billion blockchain fund that it launched in May. The fund will be used to invest in blockchain companies.
And so the world indeed seems a strange place considering that China has made several rabid attempts to completely stamp out cryptocurrency trading by its citizens not only within its borders but also on offshore platforms .
And now the country suddenly seems to have developed a new fondness for blockchain technology.
It all began about three weeks ago when, in a rather strange move, Beijing's Center for Information Industry Development released a cryptocurrency index that's supposed to rank public blockchains. The index rates blockchains using parameters like usefulness of the application, innovativeness of the project and technological capability.
About week ago, government-controlled main broadcaster, CCTV, touted the value of blockchain technology declaring it was “10x that of the internet”, as SafeHaven reported recently.
But with the Huobi deal, China is putting its money where its mouth is.
Yes To Blockchain, No To Crypto
China's stance of embracing blockchain but rejecting cryptocurrencies is meant to inspire its citizens and corporations to come up with blockchain-centric projects of their own.
That much is evident going by some of the claims made during the show, including by the country's academia and corporate leaders that blockchain is capable of creating companies 10x bigger than Google or Facebook.
But there is still some level of schizophrenia coming out of Beijing. While cryptocurrency is not blockchain in itself, Beijing rejection of cryptocurrencies means that it is at least rejecting some of the fundamentals of blockchain technology.
These include the concept of tokenization, which is the main currency used in blockchain projects as well as free movement of assets and decentralization (non-government controls).
In fact, it's quite disingenuous because Huobi itself has raised millions of dollars by selling tokens at $5 a pop.
To give you a further glimpse into Beijing's rather twisted view of crypto--the country's central bank is trying to build a centralized cryptocurrency.
So, this is really all about control, as it nearly always is with the Beijing government.
Emerging economies like China stand to benefit the most from blockchain where the technology could streamline inefficient service delivery systems, property registrations, government and corporate record keeping systems and smart contracts to name a few. As long as every aspect of it is controlled by Beijing …
By Alex Kimani for Safehaven.com