China moves into blockchain mode

China Moves Into Blockchain Mode

For the last year or so, China has had a reputation for being anti-cryptocurrency and blockchain. However, this appears to be changing. Muyao Shen, writing at Forbes, reports that May 2019 may be the month that becomes known as the time when China did a U-turn and started to embrace blockchain technology.

According to her report, more blockchain projects in China are getting government support, including even working with government bodies to develop know-how for future blockchain platforms. This is distinctly different to the environment back in September 2017, when the People’s Bank of China (PBoC) together with several other central government agencies and financial regulators announced that it would ban initial coin offerings (ICOs).

The knock-on effect of this was that other East Asian countries closed their doors to anything related to cryptocurrency, especially the exchanges. The reasoning behind this attack on crypto was to protect people from crypto scams, but it had a dramatic effect on China’s crypto industry, with Binance, now one of the biggest exchanges globally, moving from Beijing to Tokyo.

Now, after a period during which any talk of blockchain or crypto in China was distinctly muted, things are moving forward. For example, the Cyberspace Administration of China (CAC) recently released the first list of registered blockchain service providers. The list includes well-known names, such as Alibaba and Baidu. As they are now registered , “these blockchain-based information service providers are granted registration numbers under the Regulations on the Management of Blockchain Information Services,” Shen reports.

This new set of regulations was reviewed and approved by the State Council Information Office earlier this year and was then implemented on 15th February, 2019. Regulators in the provinces have been working on the regulations that will hopefully grow China’s blockchain industry.

The ‘cyber police’ appear to be the officials hosting many of these meetings with tech companies, according to information from Xuemai Yu, chief executive officer of Hangzhou-based blockchain company DataQin. Yu also remarked that officials were keen to explain the nuances of the regulation: “The most important part was that they’ve divided all the blockchain projects into two categories, one is blockchain service providers, the other is blockchain technology providers.”

And the officials what they don’t like: 1. The public blockchain, where anyone can access and write and read anything they’d like to; 2. ICO-related scams.

“From the central government’s perspective, they want to make sure any information that could potentially harm the national security and stabilization wouldn’t spread on the Internet through blockchain,” Yu said.

The upshot appears to be that Chinese companies are already feeling confident about the development of blockchain in the country: Zhihao Zhang, assistant general manager of IT department at Soochow Securities Co, said:

“With the improvement of people’s acceptance and the maturity of the technology, the decentralized consensus will inevitably bring revolution in all areas of people’s lives, where things can be handled more openly and conveniently.”

Will this reversal of fortune for blockchain in China ripple out to have an effect on global attitutudes to the technology? That is an interesting question, to which I have no answer right now.

China moves into blockchain mode was originally published in Hacker Noon on Medium, where people are continuing the conversation by highlighting and responding to this story.