China’s Global Blockchain Push Not Done Yet
The effect of President Xi Jinping’s bolstering comment on blockchain is not going away. It’s now being attributed to be fanning the pressure on another economic superpower, the US, to pursue similar push with time even as global economy enters a new phase.
Ripple’s founder, Chris Larsen, recently hinted at the San Francisco Blockchain Week that the Chinese President’s endorsement of blockchain technology has put the US regulators under pressure to act as they haven’t done so hitherto due to complications they encountered while dealing with banks and financial institutions.
Now, China and the United States seems ready to cancel the tariffs both countries have imposed on themselves during their months-long trade war in phases, according to the Chinese commerce ministry on Thursday. What will come next with regards to blockchain in the build-up is not known. Though no specific timetable has been suggested for the tariff withdrawal, signs should start emerging by Dec. 15 when an interim U.S.-China trade deal that is expected to include a U.S. pledge to scrap tariffs on about $156 bln worth of Chinese imports, including cell phones, laptop computers and toys is supposedly scheduled.
Aside that, the People’s Bank of China (PBoC) has also been running with the premier’s view on blockchain. Its latest partnership with the Shanghai commerce commission see them saying on Thursday that the use of blockchain technology solves the issue of information asymmetry in trade finance and the core problem of providing proof of trade authenticity. This valuable use case for the distributed ledger technology could advance China’s global commercial interest.
It could be recalled that China has been preparing to become the first country to launch a digitized domestic currency which market experts say is a testament to both financial innovation and Beijing’s desire to have fail-safe control over its cash economy. Powered partially by blockchain technology and dispersed through digital wallets, the Digital Currency Electronic Payment (DCEP) project has been five years in the making. DCEP has features that differentiate it from other blockchain projects like its allowing the apex bank to track the movement of the currency and even supervise transactions.
While the Chinese warmth to blockchain is not a given for cryptocurrencies, Charles Hayter, the CEO of cryptocurrency market data provider, CryptoCompare, says the two – blockchain and cryptos – “are mutually exclusive” in their purest terms but can be used in concert.
“Blockchain does not mean crypto and crypto does not necessarily mean blockchain (if by crypto we mean digital bearer certificates),” he said while giving his view on how President Xinping’s “endorsement” of blockchain could mean a “mixed blessing” as it impacts cryptocurrencies. “But reading between the lines, there is a definite impetus to both areas from Xi’s words. For blockchain, this builds upon and adds to Estonian moves with identity as well as the UK’s research done by its Chief Scientific Officer and other nation states – but with blockchain the strength of any shared distributed or enforced ledger is the network it encompasses. For crypto, the rumours have been swirling about a digital Yuan – or the first CBDC from a top tier nation. With the digitisation of M0 money supply from China, there are worries of a new tool for internal control or even an added facet in the expansionist belt and road initiatives. A digital yuan would compete with bitcoin – but there is an endorsement of the medium of digital money. So a mixed blessing.”
For Bobby Ong, a co-founder of Asian crypto aggregator site, CoinGecko, President Xi’s announcement that China will now put blockchain as a major focus for the nation is to develop competencies. ”
“It is a very good sign for the overall industry as now China will be looking at blockchain technology positively instead of it being banned,” Ong said. “This will encourage more people to look into this space and grow it further!”.
Though particular reference not made to blockchain but WIPO in its newly-released annual World Intellectual Property Indicators report shows that Asia accounted for more than two-thirds of all patent, trademark and industrial design applications in 2018 with China driving overall growth in demand for intellectual property rights. The US tops patent applications in export markets.