China’s state media today praised blockchain technology and the potential benefits it may bring to society.
The People’s Daily – China’s largest newspaper and official outlet of the Communist party today published a feature article on blockchain technology. The piece was highly positive, describing the many potential benefits of the technology to both Chinese citizens and the paper’s three million international readers.
It began by outlining the “highly ingenious” structure of distributed decentralized ledgers, before describing areas where the technology could be life-changing; “financial difficulties, public welfare, supervision, counterfeiting and many other areas of pain and difficulty”. Blockchain was described as potentially the next internet, with the publication stating that Chinese authorities would better promote and use blockchain technology in order to continue to improve infrastructure and strengthen the formulation of relevant laws and policies.
A distinction was however made between blockchain and cryptocurrencies – the piece pointed out that blockchain is the underlying technology and infrastructure of bitcoin, but that there may be many more implementations of the technology. Whilst no direct criticism of virtual currencies was made, the piece did warn citizens of investing in overseas projects. Earlier this month China’s Internet Financial Awareness body called for greater awareness regarding the risks of ICOs, (Initial Coin Offerings), and today’s article expanded upon this statement. According to the article, most ICOs have nothing to do with technology development. Instead, they were described as “fishing for capital” – a process draining good investment money into bad hands.
The Chinese authorities’ attempts to spread awareness of the risks of ICO’s follow strong crackdowns. Last September the government issued a sweeping ban on ICO’s and forced cryptocurrency exchanges to close. According to data taken from Coinmarketcap, Chinese market volume, which represented over 98 percent of global markets fell a staggering amount to just 15 percent.
Whilst the country has been strong-handed on cryptocurrencies, today’s publication shows that the authorities recognize the potential of the technology underpinning them. With reports circulating last year that China has plans to create it’s own national cryptocurrency, it seems likely that the government’s main concern was its lack of control over developments. The article seems to imply that whilst it is unlikely that fully decentralized cryptocurrencies such as Bitcoin, Ethereum and other systems will return, China wishes to embrace the technology underpinning them – on its own terms.