China has been at the forefront of blockchain development in the past year, investing heavily in both private and government-led initiatives looking to implement the burgeoning new technology. However, if the latest proposal gets passed, blockchain development in the country could get turbocharged.

According to the latest report from local news outlet Beijing News, the creation of a specialized blockchain development fund has been proposed to the National People’s Congress (NPC) of China. The report stated that Tan Jieqing, a deputy to the NPC and the director of the Institute of Applied Mathematics at the Hefei University of Technology, was the one who proposed the fund during the congress’ annual meeting. 

These meetings, called “Two Sessions” or the “langhui meetings,” take place once a year and bring together over 3,000 delegates from all across China to submit and debate various laws and legislative proposals. The meetings began on May 22 this year.

Tan said that China should be working on “vigorously” developing the blockchain industry in order to promote the modernization of the country’s governance system. Apart from modernization, the country could see huge benefits from the blockchain industry as it enables “expanding employment” and has huge “economic potential.”

Distributed accounting, consensus mechanisms, peer-to-peer transactions, encryption, and smart contracts have all attracted a lot of attention and investments in the past few years, which is why Tan believes China needs to step up efforts to get on top of the technology.

Despite huge efforts made both by the People’s Bank of China (PBoC) and various other local governments in the country, Tan believes that the number of blockchain enterprises in China is still small. Blockchain developments lack the scale, speed, and strength it needs to compete in the global market.

Tan suggested that a special fund for the development of the blockchain industry needs to be established by the government. It would encourage the innovation necessary for the advancement of the technology and enable the creation of “a number of quasi-unicorn enterprises in the blockchain industry”.

The proposed fund would fit perfectly into China’s 14th “five-year plan,” a set of goals regarding government-led investment and development the NPC sets every 5 years. It would, Tan explained, help facilitate smart governance in China and create an “honest society”. That would, as he put it, enable China to better protect national sovereignty and security. 

At first, the fund would be used to create a research and demonstration program for various blockchain applications. These applications would be tasked with the creation of government-owned and led blockchains used in the justice system, transportation industry, etc.

“All in all, through policy support, financial support, planning guidance, industrial agglomeration, as well as other less tangible means, all enterprises in the blockchain industry would be brought together and blockchain development, education, and research would be gathered to create a complete ecosystem,” Tan said. 

We are yet to see whether or not the NPC approves the ambitious new fund. As of press time, no indications on when the congress would vote on the matter were available.