The simple rule “no Bitcoin, no cryptocurrencies, only blockchain” has become the nation’s defining strategy for almost a year of banning initial coin offerings. China’s Central Bank (aka People’s Bank of China) has recently warned the citizens to stay away from investing in cryptocurrencies and ICOs. These fresh warnings have been reissued while looking that the Chinese citizens were detouring from the restrictions on digital currencies.
Alternatively, China’s Central Bank seems to be quite supporting in the development of blockchain-based trade finance platform. It believes that this development will modernize the interbank payments and assist SMBs in achieving access to a varied range of financial tools. Even the Supreme People’s Court (highest level of court in China) has issued a new set of rules defining that blockchain (or DLT) technology is an approved process to store and authenticate digital evidence.
China’s hostile standpoint against the crypto assets like Bitcoin and open-mindedness when it comes to blockchain technology could have huge geopolitical implications. China’s President Xi Jinping called blockchain a “new industrial revolution” in his speech at Chinese Academy of Sciences in May this year. The DLT technology may take off in entire China due to its fragmented supply chain and logistical systems.
The government’s stance against the cryptocurrency is made robust as its use as a tool for international trade might limit the effectiveness of Chinese exchange rate policies. The government further believes that the digital currency market has the potential to harm China’s export industry, and will further create hindrance in pushing the nation moving forward economically. Hence, the Bank of China (not People’s Bank of China) has revealed its plan to pump out massive funds in the development of fintech and blockchain technology, as reported by Forbes.
Meanwhile, the Chinese Communist Party has also expressed its hostile stance to any Bitcoin transaction or crypto dealing except the development in blockchain technology. The Party mainly looks into the process of making strong GDP growth and reducing unemployment. Having said so, while the top Chinese firms like Alibaba has already come under Chinese government protection, America’s top companies like Facebook is still prevented from venturing and disrupting the market, Bitcoinist noted.[The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views and/or the official policy of the website. ]