Ever since the start of the 21st century, a new generation of industrial revolution is substantially reshaping the global economic structure … with artificial intelligence, internet of things and blockchain constantly making application breakthroughs
– Xi Jinping, the President of China
Didn’t Chinese Ban Cryptocurrency Trading?
In September 2017, the Chinese government and local financial authorities led by the People’s Bank of China (PBoC) officially banned cryptocurrency trading, shutting down local cryptocurrency exchanges and ordering commercial banks to prevent transactions to cryptocurrency brokerages.
However, even after prohibiting cryptocurrency trading, the Chinese government and local conglomerates such as Alibaba and Tencent have continued to focus on developing the blockchain and decentralised platforms that have the potential to improve the economy and the global financial structure.
On May 26, the State Council of China ordered local financial authorities and government-funded research centres to allocate more resources in developing, deploying, and commercialising the blockchain.
Most recently, ZhongAn, an insurance giant in China founded by Alibaba and Tencent founders Jack Ma and Pony Ma Huateng, partnered with more than 100 hospitals to utilise the blockchain in processing healthcare records, financial information, and payments.
Local analysts have stated that the ban on cryptocurrency trading does not reflect the government’s stance on the blockchain as an innovative technology. The Chinese government prohibited cryptocurrency trading because it led to local investors and businesses moving the Chinese yuan out of the country to other leading economies.
China has continued to impose strict capital controls since early 2000, and the ban on cryptocurrency trading was a part of the country’s capital control policies.
The Chinese government and the country’s President Xi still remain optimistic in regard to the long-term adoption of the blockchain, as seen in the government’s blockchain initiatives and large allocation of funds into the blockchain sector.
Chinese blockchain projects such as NEO and VeChain have demonstrated massive success over the past year in the global market as well, with support from local authorities and the government.