China Encourages Blockchain Development and Passes Law on State-Sanctioned Digital Currencies
China’s negative stance towards decentralized cryptocurrencies is well-known throughout the world, due to its many policies concerning trading, mining, and overall digital currency usage nationally. Despite this aspect, China represents one of the world’s biggest blockchain and crypto hubs, given that investors are keen to invest in the development of such technologies.
China has also often expressed its interest in blockchain technology, and more specifically, in central bank digital currencies (CBDC). In fact, recent reports indicate that the Asian nation has recently passed a law meant to create the legal framework meant for the release of the nation-sanctioned digital currency. The law concerning state-sanctioned cryptocurrencies will be fully implemented at the start of 2020, and its main purpose is to ‘help develop the crypto-asset industry, while ensuring the security of the cyber space’.
When referring to state-sanctioned digital assets, the law likely refers to any type of digital currency that is directly sanctioned for national use by the government. As many may expect, this might also include China’s upcoming CBDC, which will serve as a digital version of the Yuan.
It’s very interesting to see this development now, given the fact that China’s President, Xi Jinping, recently made a few statements regarding the nation’s interest in the development of blockchain technology. As such, since investments in the development of blockchain technology are to be supported, stock prices quickly rose to new heights.
Despite this aspect, the Chinese state media recently released a press statement, urging investors to understand that the recent developments don’t mean China is now completely open to the usage of digital currencies. Rather, the new laws are mostly meant for blockchain and other related technologies. As such, the statement read: ‘Blockchain’s future is here, but we must remain rational’.
A better understanding of the current market state in China will be possible in the next couple of months, once the regulatory framework has been discussed by the blockchain and cryptocurrency community in China.
In other news, recent reports showcase that Canaan Creative, a Chinese digital currency mining giant, has recently filed for a $400 million Initial Public Offering (IPO), in the United States. As a publicly-traded company, Canaan will have access to massive funding, therefore the ability to further expand its cryptocurrency mining services. If the IPO is completed according to plan, the mining giant will become the second Chinese company that will be available for public trading in the US.
Many reports indicate that numerous crypto-related companies in China have chosen to move to other nations, due to regulatory hardships. However, no official statistic in this sense is currently available for consultation.