China's relationship with cryptography and blockchain is complicated, with a technological investor claiming that it is a "hate-love relationship".
No Love Lost Over Crypto
Edith Yeung, head of China's 500 startup unit, spoke with CNBC at East Tech West when she commented on the country's stormy relationship with crypto and blockchain:
On blockchain and crypto, it's really a love-hate relationship. The Chinese government has special funds to invest in blockchain. What the Chinese government does not support is the encrypted part of things, which is challenging the fundamentals of financial systems.
It's no secret that China is not a fan of the encrypted market. Last September, the government took steps to ban trade and initial coin offerings (ICOs) in the sector, which, at the time, was one of the major players in the industry. As a result, Mainland Chinese investors moved to overseas platforms to continue trading.
In February it was reported that China was moving to eradicate the cryptocurrency trade with a ban on foreign platforms. Then in August, Tencent's WeChat announced the closure of several public accounts that provided news and updates on the ecosystem. According to the report, they had violated Chinese regulations for instant messaging services.
In the midst of all this, the Chinese central bank, the People's Bank of China (PBoC), has issued a warning to the encrypted investors.
The love of China for Blockchain
While China remains against the cryptic industry, it is embracing the underlying blockchain technology with all its heart.
In May, it was reported that Tencent Holdings was addressing the blockchain to help the Chinese city of Shenzhen fight false invoices and prevent companies from exploiting tax loopholes.
Even internet giants like Baidu and Alibaba are turning to the blockchain. According to the China Internet Report, created by Yeung, China wants to be a technology leader. Shenzhen has already set up a $ 500 million fund for blockchain investments while the Chinese city of Hangzhou plans to invest 10 billion yuan in a blockchain fund.
For Yeung, he thinks that blockchain companies have potential from companies. In the CNBC report, he said:
I was looking at a user case where they were trying to certify diamonds. Diamonds come from a place and you pass it (on) … you want to make sure they are real jewels for us. I think there are a lot of really practical use cases where the whole world can use blockchain.
Do you think China will eventually soften its position towards the crypt while digging deeper into the blockchain? Let us know in the comments below.
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