Last week, China’s president Xi Jinping took Blockchain-oriented domestic politics to another level: the country’s leader mentioned blockchain as “a part of technological revolution”[1]. The sentiment was then picked up by China’s largest TV broadcaster, as the viewers were told that “the value of blockchain is 10 times that of the internet[2]”.
Besides the high praises coming from the top of the state, there’s action, too: in the past few days, Chinese central bank developed a system[3] to issue blockchain-based checks instead of paper ones, while Alibaba-affiliated insurtech firm promoted blockchain use[4] in healthcare industry. Here’s how China got there, and how state-supported blockchain adoption can coincide with severe cryptocurrency regulation.
Strong, but troubled market
China is a major player in the Bitcoin market, hosting a substantial share of Bitcoin miners (in 2017, it was estimated that 50 to 70 percent of Bitcoin[5] mining took place in the country) and Bitcoin trading volume, although both factors used to be more impressive before a wave of regulatory suppression. At the moment, cryptocurrency trading is prohibited in the country: after the last fall’s crackdown[6] on local exchanges and ICOs, people in China can hold cryptocurrencies, but cannot legally exchange them for fiat money.
Moreover, China’s notorious mining industry has been hit by regulatory bodies as well, pushing local miners to move shop[7]. Due to the crackdowns, Chinese ASIC chip manufacturer Bitmain, the world’s most profitable mining company, decided to turn to artificial intelligence[8] as an alternate revenue source. “As a China company, we have to be prepared”, explained[9] Bitmain’s co-chief executive Jihan Wu.
Repressive tendencies of the state have been certainly noticed by the
