Last week’s comments by China’s president Xi Jinping that the “blockchain was 10 times more valuable than the internet” clearly highlights the direction that the Chinese government is taking regarding the cryptocurrency space, according to Cointelegraph.
Adding to those comments, the president referred to blockchain as “a part of the technological revolution”. If this “revolution” is already underway, where exactly does that leave bitcoin, following cryptocurrency’s trading ban in the country enforced earlier this year? Under the ban, Chinese residents can hold cryptocurrencies, but can’t currently trade them.
Add to that the prohibitive attack on China’s mining industry by regulatory bodies and things don’t look too bright for Bitcoin when juxtaposed to China’s new enthusiasm for blockchain.
Given these current conditions, China is still a major Bitcoin player with 50 to 70 percent of global mining taking place in the country, although this number is not comparable with its far more significant figures before the ban was actually put in place. Many miners have relocated under China’s crypto skeptical regime and the bans have made their mark on global markets when Bitcoin dropped to its lowest level in more than a month, with Ethereum (ETH) declining 19% and Ripple (XRP) collapsing 29%.
In 2013, banks and financial organizations were prohibited to carry out any crypto-related operations, and all companies offering any services involving Bitcoin were obliged to register with the relevant authorities and to follow know-your-customer (KYC) procedures to prevent money laundering and tax evasion, as Cointelegraph points out.
The situation has deteriorated even further now that ICO’s have been clamped, and exchanges shut down. With 15 closing, some moving to Hong Kong or staying on and becoming fiat free, to avoid the governments no trade for fiat regulations. Despite this and a further increase in regulation, China still boasts the top 20 cryptocurrencies in the global market in terms of valuation.
No such problems for blockchain, as exemplified by Xi Jinping latest stance, and his proclamation that the internet pales into insignificance alongside the new technology:
“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.”
Hangzhou is fast becoming blockchain’s Chinese Mecca, the city where Alibaba was founded, with its new Blockchain Industrial Park and $1.6 bln innovation fund. Also, Hangzhou will gain from the construction of a research institute established to provide academic support for the development of blockchain tech in the city.
Recently Blockchain was heralded for its internet-crushing-value on a China Central Television (CCTV) broadcast by the state-backed TV channel tagging it as being “the machine that generates trust” whilst in the same program making further attacks on cryptocurrency.
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