Blockchain development accelerates in China – but is it good for crypto?

crypto yuan china

A new report has found China is leading the world in blockchain and the pace of development is accelerating. But is it good for crypto?

A new report has found China is leading the world when it comes to blockchain, and the pace of development is accelerating.

The crypto yuan is just one part of China’s massive blockchain drive, which would bring centralized distributed ledgers to all aspects of life under the regime.

According to a recent China Blockchain Report, Chinese firms represent 68% of the total global blockchain patent filings with over 10,000 already filed.

Major stakeholders in the country’s technology, finance, healthcare, food, and automotive sectors are investing heavily in blockchain and there were over 260 enterprise blockchain projects launched this year.

According to a Forkast.News study of LinkedIn profiles in China, there were 5,290 blockchain developers in the country in 2019, up from 3,780 in 2018.

Efforts began in 2014 under the watch of former Gov. Zhou Xiaochuan. Since then, the PBOC has filed 63 patents related to blockchain while over 10,000 blockchain-related patents have been filed in China overall, according to the China National Intellectual Property Administration (CNIPA).

The government is aggressively pushing blockchain as an issue of national importance and its control over the operations of all industry is likely to be extended to the data stored on the respective distributed ledgers.

The development of decentralized digital assets will continue regardless but it has become quite clear that only Chinese state flavored ones will be encouraged in the world’s most populous country

china blockchain

Big Brother’s cryptocurrency

What Chinese banks and officials do want is for their burgeoning population to be familiar with digital currencies as the state prepares to launch its crypto yuan or DCEP (digital currency electronic payment).

As with most things out of the autocratic nation, the deeper motives are likely to be more sinister.

Cash is anonymous and difficult to track by authorities but a blockchain based currency will yield a wealth of financial data on the monetary movements of its people.

Just like its vice like grip over the internet and flow of information, China will probably use its digital currency for mass surveillance purposes.

Professor of economics at the London School of Economics, Keyu Jin, reaffirmed this notion speaking to Reuters last month.

“ over-obsessive control and governance is probably more unique to China than anything else.”

China’s Bitcoin boost

Following a huge crypto market pump in October the Chinese government has attempted to suppress any links between Bitcoin and its own blockchain ambitions.

BTC surged from current prices to top out just below $10k in just a couple of days marking a gain of around 40% on the back of bullish commentary from President Xi Jinping.

The Communist Party of China leader clearly did not realize what impact this would have on global decentralized currency markets. It was effectively opposite to the desired effect.

Since then the FOMO has waned and the regime has reasserted its anti-crypto position by shuttering a few small exchanges and republishing warnings.

State propaganda outlet, People’s Daily, has been ramming the message home with editorials promoting blockchain in recent weeks but emphasizing that it is not Bitcoin.

Contrary to popular belief, owning Bitcoin is not illegal in China. This was reaffirmed by Binance CEO Changpeng Zhao during a recent interview.

What is forbidden however is buying digital assets with fiat as the banks want nothing to do with it.

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