President Xi Jinping Fuels China’s Renewed Appetite For Blockchain

President Xi Jinping Fuels China’s Renewed Appetite For Blockchain

by November 1, 2019

China’s appetite for blockchain has surged after Chinese president Xi Jinping proclaimed the technology as an “important breakthrough” and said “greater effort should be made to strengthen basic research and boost innovation capacity.”

The Communications Industry Association, an affiliate of the Chinese Ministry of Industry and Information Technology, is proposing that October 24 become the designated day to celebrate blockchain, according to a report by the South China Morning Post.

“It’s a milestone for us, as blockchain researchers, to carry out related projects and support the real economy,” the committee said.

“[President Xi] blew the horn of progress for the future. It is our full aspiration that we will start our businesses with the [Communist] Party, speak out for the technology, and applaud its applications.”

China’s Communist Party (CPC) has even released a decentralized app (dapp) for members to attest their loyalty on a blockchain, according to a Coindesk report. The dapp allows members of the party to pledge their allegiance and store it on a blockchain, which can be shared and seen by others.

Going even further, a report by CNLedger claims that the country has been removing online posts claiming that blockchain technology is a scam. The report claims that ads for blockchain courses had begun appearing on popular apps and social media sites in the country, adding that “articles saying blockchain technology is a scam are now banned.”


Blockchain, an “important breakthrough”

On October 24, president Xi delivered a speech on the importance of blockchain, stressing the need to accelerate the development of the technology in China.

Blockchain would play “an important role in the next round of technological innovation and industrial transformation,” Xi said, and it is crucial for China to “gain an edge in the theoretical, innovation and industrial aspects of this emerging field.” In particular, China should step up the standardization of blockchain to increase its influence and “rule-making power” in the global arena, Xi said.

Just a few days after the president’s comments were made public, the Standing Committee of the 13th National People’s Congress in China passed a new law aimed at “facilitating the development of the cryptography business and ensuring the security of cyberspace and information.” The law, which will come into effect on January 1, 2020, tackles emerging regulatory and legal challenges in commercial cryptography use-cases, according to Coindesk report.


Giving the industry a boost

Xi’s speech has triggered a surge of interest in blockchain in China.

Searches for “blockchain” on Chinese search engine Baidu surged by more than 40 times in the two days after Xi’s comments, and several of the country’s most prestigious universities even rolled out courses relating to blockchain overnight. “Massive blockchain initiatives” from local governments were also unveiled on social media.

The market has also responded optimistically to the comments. The price of Bitcoin jumped to US$9,370 on Monday from US$7,500 before the statements, and more than 110 Chinese companies whose businesses are connected to blockchain saw their stock prices soar by their daily limit of 10% on the country’s stock exchanges.


Blockchain but not crypto

Xi’s proclamations came despite his government’s ban on cryptocurrency trading and initial coin offerings (ICOs), which has been in effect since 2017. According to a report by Reuters, China is also looking to ban cryptocurrency mining, an industry in which the country plays a key role on the global scene with the Sichuan province alone accounting for over half of the global bitcoin mining hash power.

Despite the regime’s tough stance on cryptocurrencies, the People’s Bank of China (PBoC) has been a frontrunner in research into blockchain and its use in creating a national digital currency.

In fact, PBoC has been exploring the possibility of creating a cryptocurrency since 2014. The state-owned digital currency is expected to launch early next year.