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Detailed interpretation of the development history of China's blockchain: how does the Chinese government view blockchain and cryptocurrency

Time : 03/06/2022 Author : 3vydsa Click : + -
        Through bitcoin, the concept of blockchain was born. Blockchain technology will release opportunities globally and challenge China's current dominant position in the field of financial technology and big data. China has been using technology to improve the lives of its citizens, from mobile payments to high-speed railways and driverless vehicles. Therefore, it is not necessary for Chinese people to adopt blockchain nationwide. In fact, there is strong evidence that China is moving towards a country driven by blockchain. Blockchain is a technology usually related to cryptocurrency, which may change our way of life and trust. As technology matures and becomes easier to adopt, we will soon see it embedded in our daily life.
 
        There is no doubt that China will become the forefront of the blockchain wave. With the adoption of blockchain by the State Council of China in its 13th five year plan, the total amount of cryptocurrency market increased by 30 times in 2017. Blockchain and cryptocurrency have become a hot topic of generation Y in China. Companies and the public are attracted to technologies that they do not fully understand. Therefore, Chinese policymakers are eager to establish frameworks and standards to accelerate the adoption of blockchain technology in the industry, while protecting and educating investors in the nascent and unregulated cryptocurrency ecosystem. The results can be confusing. In June 2017, officials at the Dalian new leaders annual meeting welcomed the white paper of the world economic forum "realizing the potential of blockchain". Less than three months later, the people's Bank of China announced that it would immediately ban ICO - the original coin products, through which crypto startups raised funds for development - and close all domestic cryptocurrency exchanges.
 
        At the same time, sun Guofeng, director of the Financial Research Institute of the people's Bank of China, clarified that the ban "should not prevent relevant fintech companies, industry institutions and other technology companies from continuing to study blockchain technology". Two weeks later, the Ministry of industry and information technology of China launched the trusted blockchain open laboratory. The laboratory promotes the exploration of blockchain technology, without involving the issuance of cryptocurrencies or the exchange for trading them. Before the crypto boom in 2017, China was the largest cryptocurrency market and bitcoin mining company. At the peak of the end of 2016, RMB accounted for more than 90% of the global bitcoin trading volume. However, as far back as December 2013, Chinese ministries have taken actions against bitcoin.
 
        An official notice entitled "notice on preventing financial risks of bitcoin" describes bitcoin as a virtual commodity with considerable financial risks and outlines some bitcoin related services that financial institutions are no longer allowed to provide. In January 2017, a similar notice was issued again to warn Chinese citizens of the risk of holding cryptocurrencies. In September 2017, in the worldwide initial coin product (ICO) boom, a notice entitled "notice on preventing financial risks of issuing tokens" was released. China's ICO is prohibited; The ongoing ICO was forced to refund to investors, while the upcoming ICO had to relocate overseas to avoid the ban.
 
        Many Chinese exchanges, such as BTCC and okcoin, were forced to close their local offices and relocate to cryptocurrency friendly countries such as Singapore and Denmark. Mining plants using dedicated "computers" called ASICs (application specific integrated circuits) were forced to close, further weakening China's cryptocurrency community. Since the crackdown, China's renminbi trading volume has dropped to less than 10%. The ban shocked the reasons of the international community and prompted countries to take a stand against digital currency. Many people oppose China's aggressive anti cryptocurrency policy, claiming that it is absurd and groundless. People must understand that the ban is temporary, but it is necessary.
 
        The ICO foam is rapidly expanding in the Chinese community, and there are hundreds of Chinese ICOS at any time. Many Chinese retail investors lack basic knowledge of blockchain and are attracted to the potential of 10 times return. For many, ICO seems to be a sure bet during the cryptocurrency boom. However, according to a recent report of the National Committee of experts on Internet financial security (ifcert), there are 421 fake cryptocurrencies, 60% of which are located overseas, making it difficult for the authorities to implement any measures. Since then, the temporary ban has not only forced the destruction of the ICO foam, but also provided band aids to China's cryptocurrency industry.
 
        It provides a good opportunity for the authorities to click the pause button to enact legislation and eliminate fake items. In addition, officials remain silent about owning cryptocurrencies. It remains to be seen whether it will be completely banned, although it seems unwise and impossible to do so. Since the ban, many people have relied on VPNs and overseas accounts to continue trading, although the latest crackdown may make this approach infeasible. The Chinese authorities have stepped up the freezing of Bank of China accounts, which are suspicious of the existence of funds crypto accounts, and blocked access to any cryptocurrency related websites. We searched the Internet for some information about blockchain, and it is not difficult to find that the Chinese government is actively encouraging the promotion and adoption of blockchain technology in China.
 
        Obviously, the difference between cryptocurrency and blockchain is clear, and the positive role of the Chinese government in promoting technology is being rewarded. In the government and government departments, although blockchain technology has taken a strict stance on cryptocurrencies, they are considered to be one of their priorities. In addition to the "13th five year plan" which explicitly mentions blockchain technology as part of its core development plan, reports such as China blockchain development report 2018 and China blockchain technology and Industry Development Forum show the Chinese government's support for blockchain. Recently, in February 2018, China's official newspaper "people's Daily" published a full page special topic entitled "three problems of blockchain", further highlighting the country's positive position on blockchain.
 
        The National Audit Office of the people's Republic of China is also exploring the functions of the blockchain to ease the bottleneck caused by the current data infrastructure and improve audit practice. At the provincial level, cities are still the key way for Chinese government funds to reach ground communities. Cities across the country have been actively promoting their own blockchain plans to attract start-ups to join their ecosystems. Recently, Hangzhou, where Alibaba Group's holding company is located, invested 10 billion yuan in blockchain companies, of which 30% came from the Chinese government. A Hangzhou blockchain Industrial Park has also established a blockchain incubation and innovation center; The park currently has 10 blockchain companies.
 
        Chinese cities have also set up funds to attract blockchain startups. Shenzhen announced a fund of 500 million yuan, and Guiyang provided subsidies of up to 5 million yuan to qualified blockchain startups. Within the enterprise, major companies have committed to develop and adopt blockchain technology into their operations. Alibaba is a good example. Among the 406 international blockchain related patents submitted in 2017, Alibaba has 43, followed by the people's Bank of China (PBOC), which has submitted 68; China has submitted more than 200 patent applications in total, followed by the United States with 91. In the application field, Alibaba's two subsidiaries, t-mall and Cainiao, cooperate to track imported goods on their platforms using blockchain technology.
 
        Alibaba cloud has also cooperated with Xiamen Zhongchuan Internet of things industry research institute to develop a blockchain plan for the Internet of things (IOT). In addition to Alibaba, some Chinese giants also use blockchain technology in their business. Jd.com tried the use of blockchain in its supply chain to track and prove the authenticity of imported beef products. Tencent, the Internet giant, released a white paper in 2017, detailing the application of blockchain services on an open platform called trustsql. Recently, the leading Internet company Baidu launched totem, a digital image property management platform that uses blockchain to submit timestamps to protect content creators from intellectual property infringement.
 
        Obviously, these Chinese enterprise groups understand the value of blockchain and actively participate in it. The people's Bank of China (PBOC) is actively working on the digital currency and electronic payment system developed by the state to provide the advantages of digital currency while maintaining a high degree of control over its availability and traceability. As early as 2017, it has conducted small-scale transaction tests with several Chinese banks. This digital currency will undoubtedly be more efficient, reduce the opportunities for fraud and counterfeiting, and allow citizens in rural areas to have more access to financial services. Digital currency maintained by commercial banks is expected to become a digital substitute for fiat currency. "... due to technological development, digital currency is inevitable.
 
        In the future, the use of traditional banknotes and coins will shrink or even disappear. "Zhou Xiaochuan, the longest serving governor of the people's Bank of China. Although the Chinese authorities seem to be taking advantage of the advantages of digital currency to improve the current financial system and control the anonymous and decentralized functions that define cryptocurrencies, they may integrate these functions in the future. Yao Qian, director of the digital currency Research Laboratory of the central bank, explained," the digital currency issued by the central bank (CBDC) It is inevitable to integrate more functions in the future. A method of strictly imitating fiat currency and digitizing it may undermine the competitive advantage of CBDC for a long time. "At that time, this digital currency is unlikely to have any similarities with cryptocurrency.
 
        With more and more millennials and the middle class now demanding greater transparency and accountability, especially in the consumer goods industry, China is paying more and more attention to blockchain and cryptocurrency. In addition, the industry is trying to cope with the low efficiency of the existing system, which may be solved through the blockchain. At present, there is a huge gap between the existing infrastructure of traditional enterprises and the blockchain technology. Companies such as Neo, qtum and vechain are seeking to narrow the gap by simplifying the requirements of blockchain integration and lowering the entry threshold. With ease of integration, China may soon adopt blockchain to achieve critical quality. So far, there are no official rules and standards for the use of blockchain technology and cryptocurrency.
 
        Although the world is generally excited about blockchain, international frameworks and standards are necessary to regulate the industry and promote its adoption in enterprises and end consumers. ISO / tc307 blockchain and distributed ledger Technical Committee is one of the committees of the international organization for standardization, focusing on the framework and application of blockchain technology. Although China has participated in the ISO / tc307 Committee, it is also interested in implementing its own regulations at home. The Ministry of industry and information technology (MIIT) and several departments have recently established a national departmental technical committee for standardization of blockchain and distributed accounting technology to formulate national standards for the local blockchain industry.
 
        The standard is expected to be published by the end of 2019. So far, it is obvious that the Chinese government does not like bitcoin, but looks at the technology behind it. As China seeks overseas alternative investment, China has long strictly restricted capital outflow. Cryptocurrencies provides a simple, fast and anonymous channel to transfer funds abroad, which is a great attraction to the local people in China, but it is not welcomed by the government. We cannot deny the benefits that blockchain will bring to the world. Although blockchain has been iterated many times in the past 10 years, its basic characteristics of immutability, transparency, security and decentralization are still the core of the technology.
 
        China has taken concrete measures to make it part of its core technology. With the vigorous development of blockchain enterprises in various parts of China and the strong support of local governments, we will undoubtedly see the rise of Chinese blockchain. Nevertheless, the characteristics of the blockchain are likely to undermine the ideology and centralized system governing its country. It also needs to educate its personnel about technology, rather than being blindly attracted by its potential to destroy the industry. In general, the Chinese government has shown a positive attitude towards blockchain technology. However, although blockchain technology will become an important part of the future, it is still in the early stage of development. Working in this industry feels like walking on the path of the first sunshine coming soon.
 
        Blockchain deserves an unlimited and imaginative future. The ability of blockchain to transfer trust from humans to 1 and 0 may be the biggest feature of this technology, and may also be essential in the era when lies and fraud are seamlessly woven into our daily life. Known as the next best thing since the Internet, this technology is increasingly recognized by the government because it has the potential to change our life, work and interaction. Now, all countries are focusing on the blockchain. China is no exception.
 
        
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