China's Change of Heart for Blockchain and Cryptocurrencies
China's state-run news agency, Xinhua, published a report recognizing Bitcoin as being "the first successful application of blockchain technology." I believe that this as a significant development for digital currencies in China as it finally shows that the country is recognizing cryptocurrencies and their application through blockchain technology. Earlier this year, China’s National Development and Reform Commission (NDRC) proposed a plan to ban crypto mining in the country. However, they have recently decided to no longer move forward with that plan. The plan which was supposed to go into effect on January 1, 2020, initially had crypto mining on the list of industries that will be eliminated in the country but have since removed it from the plan. This shows China’s changing sentiment surrounding the cryptocurrency industry.
Local sentiment in China has changed in regard to blockchain and digital currencies. China’s government did extensive public research and consultation prior to changing its initial ban decision. This shows that the public has a positive notion towards blockchain technology and cryptocurrency; enough for China to no longer ban cryptocurrency mining in the country. Chinese companies such as Bitmain – one of the largest manufacturers of cryptocurrency mining rigs – have continued to believe in and push cryptocurrency in the country and around the world, and China is now taking note and following this push.
I see China headed in the right direction for cryptocurrency adoption. China’s decision to no longer move forward with its planned ban on cryptocurrency mining is just one factor that shows China’s willingness to adopt this industry. President Xi Jinping himself recently announced that he wants China to become a leader in the blockchain technology. Also, China’s Central Bank is continuously researching the viability and adoption of the cryptocurrency industry in the country; although, they have not made any final decisions yet other than announcing their intention to launch its Central Bank Digital Currency (CBDC) which is a sign that the country is moving in the right direction towards adoption.
Despite Chinese state media outlets continually reiterating their stance of caution against speculative digital currency trading, the country is nonetheless appearing to tone down its erstwhile stringent opposition to activities such as Bitcoin mining. I believe that China’s NDRC took part in extensive public research and consultation to measure the overall level of potential adoption for this industry. Seeing that the NDRC has removed their proposed cryptocurrency mining ban, shows that the country believes adoption is viable for both blockchain technology and cryptocurrency. While China’s Central Bank and state media outlets are remaining cautious and are reiterating their stance of caution on cryptocurrency trading, I believe that the country will still move forward in this space.
Being cautious is the right step to take when exploring cryptocurrency trading until more experienced is gathered. As such, I believe this is the first step for the cryptocurrency industry to reach Chinese adoption.