Timeline of China's Digital Currency. China's Central Bank pushes for digital and blockchain adoption. China looks to be the blockchain leader of the world.
ust last month, the bitcoin price was revitalized by an endorsement of blockchain technologies in China.
The price saw a 40 per cent increase over the final weekend of October.
That news was followed by a removal of bitcoin mining from China’s National Development and Reform Commission official list of industries to eliminate after being deemed harmful and wasteful to the country.
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Unfortunately, recent news suggests that the hopes for a change in views in blockchain would lead to a change in cryptocurrency views. We made a timeline for you to see below.
October 28, 2019 - China embrace blockchain technology
October 31, 2019 - China Announce DCEP (digital currency electronic payment)
November 18, 2019 - Weibo Bans Accounts for Binance and TRON
November 19, 2019 - China May Be Speculating on Blockchain Tech
December 10, 2019 - China Tests Crypto Yuan
Many experts have already come out to declare Chinese President Xi’s endorsement of blockchain technology in all of China.
Chinese state media posted that President Xi remarked at a committee session on blockchain technologies that he sees the benefits of this industry. According to a rough translation of Xi’s comment, the world leader said that blockchain should be treated as a an “important breakthrough” for innovation of “core technologies”.
“[We must] clarify the main direction, increase investment, focus on a number of key core technologies, and accelerate the development of blockchain technology and industrial innovation.”
That weekend has seen dramatic changes in the bitcoin price, with the peak reaching $10,500 BTC/USD.
China continues to shake the cryptocurrency world up with the announcement of DCEP (digital currency electronic payment). At the Shang Bund Summit on Oct 28th Huang Qifan, Vice President of China Center for International Economic Exchanges discussed, at the Shanghai Bund Summit the official details of DCEP and some background.
According to Huang Qifan:
“the People’s Bank of China (PBoC) has been studying DCEP for five or six years and is likely to be the first central bank in the world to launch a digital currency.”
Could China disrupt global trade with launch of digital currency? If China can nationalize and back a Digital coin that is much more convenient for international trade, it can wrangle power form the U.S Dollar as the de facto and preferred currency for trade. Anything for a leg up in the trade war.
Bitcoin and Blockchain Make Front-Page News on Chinese State Media Newspaper
Chinese state new agency Xinhua published an article titled, “Bitcoin: The First Successful Application of Blockchain Technology” on the its front page. The article explains the core ideas and principles of blockchain and what bitcoin is, but also critiques the cryptocurrency as well.
The article says at one point, “the most important uses of Bitcoin payments are black market transactions and ‘dark net’ transactions.” The Xinhua article also mentions the risk of Bitcoin as a currency that isn’t back by a centralized entity.
While many celebrated the fact that any publishing or mentioning of bitcoin in state media, especially on the front-page, is a good thing, it didn’t mean that China was ready to embrace bitcoin anytime soon.
Government Encourages Citizens to Call Out Suspicious Crypto Fundraising Activity
A government division under the China Banking and Insurance Regulatory Commission issued a letter to government officials in order to prevent illegal fraudulent cases that involve the usage of blockchain technology. The letter says that it [blockchain] should be explored “scientifically and rationally.”
In an effort to encourage the flagging of harmful and illegal crypto activities, authorities are now encouraging Chinese citizens to report any sort of illegal activity along the lines of ICOs, and other fundraising initiatives.
It should be noted that the Chinese government had previously launched a crackdown on cryptocurrency trading and ICOs in 2017.
Chinese social media platform Weibo blocked the accounts of Binance and TRON, to major players in the cryptocurrency space. The accounts now display a message, “This account has been reported over violations of laws, regulations, and the relevant Weibo Community Pact, thus is no longer visible to users.”
Xi Jinping Let’s the World No He is No “Crypto Dad”
President Xi gave a speech Nov 18 on CCTV1 (the CCP’s official channel). In his speech he called cryptocurrencies unregistered securities, financial fraud, and illegal Ponzi schemes. This is not the direction many wanted to see President Xi take.
Xinhua News Agency Reported Most Companies in China May Be Speculating on Blockchain Tech. Many companies were suspected of speculating on blockchain technology, meaning they aren’t really using it, but trying to benefit from the consumer and investor hype.
According to the report, 500 of China’s 3,000 listed firms said they are connected to blockchain tech legitimately, however only 40 of that 500 could back-up their claims with evidence.
Xinhua also reported that though the government has made headway and spent much time removing frauds and illegal cryptocurrencies, there are still many active scams out there using blockchain technology as front.
On Monday, Caijing Magazine stated:
"The People's Bank of China is carrying out its digital currency electronic payment project ahead of schedule, and is working with four major state-owned banks and three telecom giants to perform pilot tests of its digital currency in the cities of Suzhou and Shenzhen."
Popularized mobile based payments and fintech solutions in China have urged the central bank to into issuing a digital version of its national currency. This could potentially eliminate the usage of physical cash.
People’s Bank of China governor Yi Gang stated that "research, testing, trials, assessments and risk prevention will be required before the introduction of any sovereign digital currency," and "that the central bank did not a set deadline."
For many investors and those outside of the middle kingdom, the embracing of technology seemed like the beginning of a new direction for the relationship between China and cryptocurrency.
However, based on recent events this might not be the case. China is still making moves to be the blockchain leader of the world and their plan to be first to release a national digital currency is still top priority. Bitcoin is still a hot button topic, but anything can change in China, investors would be wise to wait and see.