China's Enthusiasm Over Blockchain Technology Could Boost Industry
By Landon Manning
Although the government of the People’s Republic of China has had a long history of trepidation over decentralized technologies like Bitcoin, it has demonstrated interest in potential government and commercial applications of blockchain technology.
But recent days have seen several dramatic developments in China’s official relationship with distributed ledger technology. On October 25, 2019, General Secretary of the Chinese Communist Party Xi Jinping delivered a speech claiming that blockchain technology “will play an important role in new technological innovation and industrial transformation,” and that it is necessary to “accelerate the development of blockchain technology.”
From that point, several other stories have emerged that indicate China will pursue the use of blockchain-based technology. On October 27, 2019, the Chinese Central Bank began imploring privately-run banks to increase the rate at which they adapt distributed ledger technology, highlighting its potential implications for the financial sector. By October 30, 2019, a new campaign of blockchain-supportive advertising began cropping up on China’s most popular apps and social media sites, while ads claiming that blockchain technology was a scam have been removed.
The greater cryptocurrency and distributed ledger community interpreted this embrace as a positive, noting that approval from China’s government will speed adoption and development of the technology.
“President Xi supports China to take lead in the blockchain space,” VanEck’s digital asset strategist and director Gabor Gurbacs wrote on Twitter, for instance. “That’s the right response from a superpower to any promising technology. I wish the United States took a similar supportive approach.”
The Chinese Central Bank is also reportedly testing a state-backed crypto asset. If and when this asset is revealed to the public, it could have a huge impact on the cryptocurrency space worldwide. It would mark the first fiat digital currency product from a leading world economy and could very well motivate other governments around the world, perhaps even the U.S., to launch digital currencies of their own. This would, of course, have major implications for international trade, financial technology, banking and more.
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