China banned ICOs, but it’s also gearing up to be a blockchain-powered nation

Photo credit: Ruslan Olinchuk

A country condemned for banning cryptocurrency trading is now at the forefront of the technology behind it.

But China has been embracing technology to improve its citizens’ lives, so it isn’t surprising that the country has adopted blockchain on a national scale. In fact, there is strong evidence that China is becoming a blockchain-powered nation.

China and cryptocurrencies

Long before the 2017 crypto-boom, China was the biggest cryptocurrency market, and its citizens were the most proficient bitcoin miners.

But Chinese ministries had been taking action against cryptocurrencies since as far back as 2013. In September 2017, Chinese government agencies banned ICOs, which shook international communities. Many have outrightly expressed their disapproval at the country’s aggressive anti-cryptocurrency policies, claiming it to be unwarranted.

But this was necessary.

The ICO bubble was expanding rapidly within the Chinese community, and many Chinese retail investors who lacked a fundamental understanding of blockchain were drawn to the 10x returns.

But a recent report by the National Committee of Experts on the Internet Financial Security Technology (IFCERT) has revealed that there are about 421 fake cryptocurrencies, 60 percent of which have websites set up overseas. This makes it hard for authorities to enforce measures.

So, a temporary ban was mandatory not only to burst the ICO bubble but also serve as a band-aid fix for the Chinese cryptocurrency industry. It allowed authorities to enact legislations and weed out pseudo projects.

Blockchain initiatives in China

Despite the ban on cryptocurrencies, the Chinese government is actively encouraging the advancement and adoption of blockchain in the nation—a move that is paying off.

The “blockchain championing” in China comes in three stratums: the government, the provinces, and the enterprises.

Government

Despite their harsh stance against cryptocurrencies, the government labels blockchain as a priority.

China’s 13th Five-Year Plan, for example, mentions blockchain technology as part of their core developmental plans. Reports such as the China Blockchain Development Report 2018 and events like the China Blockchain Technology and Industry Development Forum make Chinese government support for blockchain evident.

A made-in-China digital currency

The challenges ahead

The future of blockchain and cryptocurrencies in China