In the last two or three years, China's relationship with blockchain technology and cryptocurrencies can easily be regarded as a hatred of love.
However, in recent times, there have been numerous reports that allude to the incredible attention of the Chinese government towards cryptocurrencies. In fact, there have been numerous reports of a cryptocurrency launched by the Chinese Communist government.
Considering China's economic power, its international prowess and its immense population, it is no wonder that such a cryptocurrency can exceed Ethereum and even Bitcoin in equal measure.
Before deepening the subject and analyzing all the signs that China is bullish on cryptocurrencies, we will discuss the past events of China related to the crypt, at the current position of the country regarding cryptocurrencies and blockchain, as well as the previous ones developments relating to legislative decisions.
Past legislative decisions relating to Cryptos
If you've been fond of crypto in the last two years, you'll probably remember that one of China's most controversial legislative decisions about cryptocurrencies was to ban ICOs and any business, if any entities were increasing virtual currencies.
The Chinese government said then that the sale and distribution of tokens is an illegal method of raising funds and, therefore, a form of financial fraud punishable by law. Things did not stop there, as the Chinese government also blocked all encryption and ICO websites, including foreign platforms. However, regulatory bodies were more favorable.
Following these decisions, even the advertisements on the encrypted have been removed from the traditional media. Already in April 2018, China also stopped hosted blockchain events. Therefore, considering all these aggressive and extreme decisions that show a rather negative position on blockchain technology and cryptocurrency, it is surprising that China is, in fact, bullish on the development of blockchain and cryptocurrency.
Current position of China on cryptocurrencies
According to the People & # 39; s Bank of China (PBOC), investments in cryptocurrency (at least those not controlled) can damage the Chinese economy and potentially pose a risk to the yuan.
In short, the government has made its position on the crypt very clear: it does not want them and does not tolerate them, especially if they are external and not entirely controlled by the dominant power of China.
However, the PBOC has also issued various statements that the research and development of cryptocurrency and blockchain technology is a top priority for China. This means that the Chinese central bank recognizes the fact that cryptography will inevitably replace paper money and this requires some research in order to make the best possible decision.
Interestingly, the Chinese government has invested and supported several local encryption projects, such as the Xiong & # 39; A global blockchain innovation fund, which supports many blockchain startups. According to several sources, the government has offered at least $ 3 billion to fund emerging blockchain projects.
President Xi Jinping also made a public television appearance and called the blockchain a "revolutionary" technology.
Because China may need its cryptocurrency
Despite all the bans and the controversial attitude towards the blockchains, the national cryptocurrency began to circulate in two Chinese cities (Shenzhen and Guiyang). The national cryptocurrency in China is far from being a secret, as Zhang Yifeng, head of science and technology at the Banknote Blockchain Technology Institute, has admitted on numerous occasions that China is working on it.
The PBOC needs a digital currency to report all cryptocurrencies under state control. It is worth noting that, before the ban, China actually had one of the largest trading volumes of all countries. Not only that, but China also has a large number of crypto enthusiasts and crypto-miners, not to mention the mining crypts.
Ether and Bitcoin (as well as other cryptos) are still used in China to conduct illegal transactions and money laundering operations. The Chinese government wants to introduce its cryptocurrency to solve these problems and also to ensure that miners move to the extraction of a cryptocurrency supported by the government. With these moves, the Chinese government hopes to restore control over all financial transactions within the country.
There is not much information yet if the currency is ChinaCoin or CryptoYuan, but one thing is certain: China will enter the ranks of Russia and Venezuela that both have the same types of financial aspirations.
An interesting point is related to what effect this cryptocurrency will have on the cryptographic market once it reaches mainstream adoption in China. There are those who fear that this Chinese cryptocurrency actually blocks the Bitcoin, Ripple and Ethereum markets.
Considering all that has been said, it is safe to say that China is not really bearish or bullish on cryptocurrencies. The government in fact accepts the inevitability of the cryptographic domain compared to other traditional payment systems, but still wants to maintain complete control over all transactions within the country.
In fact, China is very optimistic about the development of the blockchain and the government seems to have a long-term plan that began with the banning of cryptocurrencies last year. The Chinese financial institutions have announced that the cryptocurrency and blockchain development will be one of the top priorities for 2018 and, so far, everything has worked accordingly.
Many cryptographers agree that China will "break" the cryptography market or drive the charge to a new bull market. It is important not to forget that China's influence on the international cryptocurrency market is immense.