Status of Blockchain in China

The Blockchain China relationship has an intriguing past and an exciting future. Speculation on cryptocurrencies are banned, yet China has wholly endorsed the technology than underpins Bitcoin-blockchain.

2017 saw a huge shift in the relationship between Bitcoin in China. At the start of the year the interaction between the 2 were very tight. China was the biggest Bitcoin market in the world and was home to the largest Bitcoin mines and cryptocurrency exchanges like Binance.

However, towards the end of 2017, the Chinese government criminalized Bitcoin and cryptocurrency activities such as mining and exchanges. Bitcoin miners were forced to close shop while most exchanges like Binance relocated to safer jurisdictions. This removed China from being the largest to the smallest, almost insignificant, cryptocurrency market. Despite this, people are still interested in Bitcoin and the profits it can bring, so speculation continued underground.

In 2019 however, cryptocurrency and especially blockchain made a huge comeback. It was announced that the People’s Bank of China will issue DCEP (Digital Currency Electronic Payment), set to be the national digital currency of China. Unlike Bitcoin, DCEP is fully sanctioned by the Chinese government, and all Chinese merchants accepting digital payments must accept DCEP.

Further, China’s President Xi Jinping appealed for urgent development of blockchain before the Communist Party of China Central Committee. This lead to China-wide efforts at all levels to promote blockchain development. For example, state newspapers immediately published articles educating and praising blockchain technology and keywords like “Blockchain is a scam” was immediately censored by local social media. In a welcome turn, the cryptocurrency mining ban in China was also reversed.