Confusion Prevails in China With Respect to Blockchain Adoption

Where the whole world seems to adopt blockchain as the secure and transparent method for peer to peer access, Chinese government and regulators have an entirely different opinion regarding this decentralized technology. China’s top regulator, Fan Wenzhong, head of the international department of the China Banking and Insurance Regulatory Commission, during a FinTech summit in Shanghai had remarked the official government’s cautious attitude towards blockchain technology and warned that the ‘mythologizing’ of blockchain could be harmful. He stated;

We all think blockchain is an innovation with significant meaning – correct. But we shouldn’t mythologize blockchain.

Fan also declared that blockchain is a very overrated technology and claiming it as a source of revolution, might be an overrated idea itself. He said;

Decentralization is not a new trend but a loop, because the earliest human transactions were without central authorities.

Blockchain is a decentralized technology which provides a peer to peer connection between two sources. This technology was derived for bitcoin but Chinese government and the regulatory authorities are not sure about the authenticity of this technology. Where the Chinese government seems very confused when it comes to adopting blockchain, Fan has also stated the Chinese government’s unclear stance over the innovations of the crypto world. He said;

Blockchain is a useful innovation but that doesn’t mean cryptocurrencies, which blockchain has given rise to, are necessarily useful.

China is a center of innovation and its economic growth is as rapid as its growth in technology and experimentation. In May 2018, Xi Jinping, President of China, displayed a completely different point of view regarding blockchain. While addressing at Chinese Academy of Sciences, he stated;

Since the 21st century began, global scientific and technological innovation has entered an unprecedented period of intensive activity. A new round of scientific and technological revolutions and industrial changes is reconstructing the global innovation map and reshaping the global economic structure. The new generation of information technology represented by artificial intelligence, quantum information, mobile communication, internet of things, and blockchain is accelerating breakthroughs in its range of applications.

Still, the Chinese authorities continued the trend they introduced and the regulatory departments are still researching ways to properly regulate this technology according to the government laws. This initiative was taken by the government to attain grip over the capabilities of this new technology. A government spokesperson at the same event had stated;

We have established verifiable blockchain programs in China, and nearly 200 private enterprises have expressed interests to join. [This] will help blockchain technology and industry to become more transparent and open.

According to an analysis by the Chinese government, duration of a blockchain project is 1.22 years whereas, only 8% of projects still exist which are based on this decentralized technology. He Baohong of the China Academy of Information and Communications Technology (CAICT) presented this statement at the China International Big Data Industry Expo 2018 in Guizhou;

(These projects) came out very quickly, but die quickly as well.

He revealed this information as a segment of the unveiling of a report on blockchain industry trends by CAICT. He further stated;

In this circumstance, governments globally are accelerating their efforts to establish unified standards in order to help blockchain projects to achieve real-life applications.

Beijing has taken an initiative of adopting blockchain but it doesn’t seem motivated for the utilization of cryptocurrencies. In September 2017, government closed down all the digital exchanges and eventually banned the mining process. Whereas, in May 2018, Beijing remained actively involved in the world of crypto and produced its first official ratings for 26 crypto assets. This campaign will expand with the addition of blockchain projects as well. He Baohong seemed very optimistic about China’s own blockchain project and said;

We have established verifiable blockchain programs in China, and nearly 200 private enterprises have expressed interests to join. (This) will help blockchain technology and industry to become more transparent and open.

No doubt that all over the world blockchain is getting massive success but the Chinese government still appears to be really confused regarding the digital ledger. At the moment, the Chinese government seems quite focused on the reformation of this technology according to the desired framework. The Chinese government has already started working on this fresh technology, making it more secure and accessible. Even though this technology might change the economic structure but still mythologizing blockchain could be harmful in future as this technology still requires enhancements to reach perfection and approval from one of the most innovate region of the world “China”.

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