Potentially bullish news from China: A high-ranking official has called for a national digital asset trading platform to be established.
Chinese People’s Political Consultative Conference (CPPCC) member Wang Penjie made the statements earlier this week.
The move would follow strict guidelines, with assets undergoing a vigorous “approval system” and users of the platform would also have to undergo a vetting process, confirming real identities. As well as opening the platform, Penjie suggested providing greater investor education regarding blockchain technology.
The official report states:
“[A]fter sound domestic laws and regulations, under the unified cooperation of the Central Bank and the CSRC, a regulated, efficient and clean blockchain digital asset trading platform will be set up for enterprises to raise funds [and trade digital assets.”
Whilst Penjie’s suggestion is not an official statement of intent by Chinese authorities, it does represent a noticeable change in perceptions of blockchain technology by officials. It follows a full-page article on the benefits of blockchain technology in China’s official news outlet, The People’s Daily from last week. The piece was extremely bullish, referring to the technology as “highly ingenious” and next internet.
These developments may be indications of a changing policy towards blockchain and cryptocurrency in China. Whilst official sanctioning of the technology is not yet a reality, there is certainly a highly positive sentiment emanating from many circles in Chinese society.
An article from Sohu yesterday is one example. It brought together the opinions of over twenty Chinese business leaders, innovators, and regulatory officials and almost all of them had only positive statements to make regarding developing distributed legend technologies, including cryptocurrencies.
Prominent Zeng Ming, chairman of the Academic Committee of Alibaba Group, which reported revenue of $23.82 billion last year, said
“the blockchain is a revolution in the relations of production and will inevitably bring about major changes in productivity and a true supply-side revolution”
This sentiment was shared by Yao Jinbo, founder of 58.com, China’s largest classified site and with a personal valuation of $1.2 billion.
“we take the initiative to embrace, to explore the blockchain. Blockchain has the decentralization and deintermediation characteristics, which may be as great as the Internet, which may be a [bigger] historical opportunity than artificial intelligence”
Others were equally enthusiastic. Cai Wenshseng, Chairman of technology giant Meitu spoke of blockchain technology as both a technological and cognitive revolution. Meanwhile Xu Xiaoping, founder of True Fund, issued a literal call to arms, imploring CEOs to join him “all in on blockchain”. His words could not have been more confident: ” Do not doubt the blockchain, do not hesitate, immediately mobilize all staff to embrace the blockchain.”
The statements from big industry players in China are not just hot air. This month it was announced that a subsidiary of the consumer giant Alibaba had successfully implemented blockchain technology to handle logistics data. At the time of writing over 30,000 imported goods, ranging from Shanghai to Shenzen had been logged with the system.
It appears that China will enthusiastically adopt blockchain technology across industries, with a broad range of use cases. However, there has been some distinction between decentralized virtual currencies, including Bitcoin and Ethereum. China has already banned foreign cryptocurrency trading platforms, blocking access to sites using its national firewall. Many observers have interpreted developments in the nation as damning for decentralized currencies – but today’s announcement that a national trading platform could be launched may be a turnaround.
Whilst there has not been official confirmation the project will go ahead, and it is also unclear whether Bitcoin, Ethereum, and other decentralized currencies would be included, today’s news marks a ray of hope.
That’s because Pengjie’s suggestion did not explicitly rule out decentralized currencies from being included.
The reopening of Chinese markets would be hugely bullish for cryptocurrency prices – at the time of the closure of exchanges, Chinese traders represented some 40% of total market share. We would likely see a huge flood of investors looking to get involved.
Whether this will come to pass is currently speculative, but with enthusiasm for blockchain technology growing significantly, we may not have to wait long to find out.