China Crypto 2018 in Review: Step up Efforts behind the Curtains
As the nascent yet disruptive blockchain technology is growing in maturity, countries are further exploring this new landscape and gradually positively shifted their sentiments towards cryptocurrency underpinned by blockchain.
The global consensus seems clear – innovate with blockchain, or fall behind the rest of the world. China, is no exception.
In particular, China is proving itself to be a leader in the blockchain sector, with blockchain startups springing up here and there, blockchain patents topping the global list. Apart from that, the country also sees its stake in the crypto space in continued growth, amassing superior mining power and the largest crypto exchanges providing crypto trading for residents there despite the government bans on all initial coin offerings (ICOs) and crypto trading on September 4, 2017.
Blockchain and cryptocurrency are often seen the same thing for their seemingly inseparable relation, while the country draws a clear-cut line between blockchain and the technology’s first widely known use – cryptocurrencies.
The country’s enthusiasm for blockchain reached an all-time high last May when president Xi Jinping made a public announcement about the importance of pursuing technological research. Xi recognized blockchain as one of the five pillars of a “new generation of information technology” along with AI, quantum computing, mobile internet, and Internet of Things (IoT).
In 2018 alone, investment guided by the Chinese government in blockchain technology has stood at over 40 billion yuan (roughly $5.82 billion). In an effort to encourage blockchain startups, Chinese government also reward up to 6 million CNY to qualified ones.
There’re even two hubs for incubating blockchain startups, Hangzhou and Hainan province have become leading zones for blockchain and fintech investment as well as project incubation. Exchange Huobi, who has moved to Singapore since the crypto ban, set its foothold in Hainan once economic development was encouraged there.
While in the crypto sector, things are different. After the ICO ban in late 2017, a serial bans followed. In early 2018, bitcoin mining was threatened as regulators took measures to limit cheap power supply for their operation; In March, a few of crypto exchanges’ social media accounts were blocked, which further roiled the crypto market in China; Months later in August, Beijing banned all venues from hosting crypto-related promotions. More efforts were made to squeeze crypto out of China.
But all these seem to have little influence on people’s crypto enthusiasm in the country, especially scammers. A bigger regulatory and legal crackdown aiming at abuse and outright crypto fraud have been in action throughout 2018. More than 200 crypto scams have been reported throughout 2018 and over 400 fake cryptocurrencies have been detected by authorities. Chinese police busted millions worth crypto scams. This no doubt helps to create a clean and healthy environment for the real crypto’s future development.
On the other side, Chinese blockchain projects are under well development, with star projects like NEO, Quantum, and Bytom having some fame both within and outside of the country.
In future, we’ll continue to see Chinese authorities maintaining control over blockchain and encouraging innovation through their own initiatives. The country is said to release a national standard for blockchain at the end of 2019, which will be interesting to see where companies will have to adjust to next. With a country so highly invested in blockchain, it won’t be uncommon to see innovations and wide adoption come out of China.
On the eve of Chinese lunar New Year, we hope all our readers’ wishes come true and a happy new year in the coming year of Pig (Zhushi shunli “诸事顺利” in Chinese).