China’s National Audit Office, one of the 29 cabinets departments of China’s State Council, has begun to discuss using blockchain to support its current data storage capacity, it was reported on Tuesday.
China already has the largest number of Blockchain patents in the world, more than the US and Japan; the Asian giant has just invested another $1.6 billion into cryptocurrency projects through its blockchain fund.
This is viewed by many as a bit of a turnaround by the authorities, given that in September of 2017 the Chinese government imposed a complete ban on cryptocurrency trading and investment between financial institutions and cryptocurrency exchanges, ordering many exchanges out of the country. At the time the government stated that cryptocurrency posed a treat to China’s State bank and the financial system within the country.
The Government clearly differentiates between cryptocurrency, which they’ve expressed a distrust of in the past, and its underlying technology, which they view as worthwhile. People’s Bank of China researcher and Central University of Finance and Economics Prof Huang Zen outlines the government’s hesitant position on digital currency:
“The sovereign state is still the fundamental player in global politics and carries with it the characteristics of the world financial system…The central bank has set up a research group and a digital money research institute to explore the digitization of sovereign money.”
The National Audit Office discussions are looking at blockchain more positively with a view to being able to “open up a window” to help streamline its massive bottleneck of data, reducing government workloads whilst guaranteeing a fully traceable ledger.
According to reports, the current infrastructure has caused the data bottleneck as the Central Office is currently required to store every piece of data reported at provisional and municipal level. The audit office sees decentralization using blockchain as a possible solution to this problem.
The Chinese Government continues, contrary to its views on cryptocurrency, to support blockchain research and development. On April 9, Chinese publication Sohu reported that the government of Hangzhou has decided to invest more than $400 million in a Hangzhou-based venture capital firm known as Tunlan Investment, to facilitate the growth of Blockchain startups and projects.