China: ‘Embrace blockchain, ignore crypto’

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Authorities in China are pressing individuals and businesses to embrace the potential of blockchain technology while ignoring the role of digital currency, according to reports in local media.

In response to a surge in BTC prices in recent weeks, authorities are looking to dampen the apparent appeal of speculating on cryptocurrencies, highlighting the lack of transparency and volatility in the market.

The Chinese authorities have long since recommended speculators stay clear of tokens like BTC, having gone as far as to outlaw digital currency trading and payments in the country.

However, the government has been clear to distinguish between the unstable fundamentals of digital currency tokens and the revolutionary power of blockchain technology, which is already shaping systems and innovations across the country, both in private and public sector use cases.

Pointing to unsubstantiated hype behind the recent BTC bubble, the authorities said “the actual reason for the current surge in Bitcoin and cryptocurrency prices is not clear.” This is in line with regular advice from the Chinese government designed to protect citizens from dubious investment schemes.

The latest comments come at a time of increasing support in China, both publicly and at the highest levels of government, for embracing blockchain technology.

Via the country’s central bank, China is known to be at an advanced stage of rolling out a central bank digital currency, known as the Digital Currency Electronic Payment system, or digital yuan.

The project has already moved beyond initial pilots, with several city-wide trial schemes having already run successfully.

Recent months have also seen further progress on a state-backed blockchain service network, which integrates with a number of existing public blockchains.

The message is consistent with China’s approach towards support and encouraging innovation in blockchain technology, while simultaneously highlighting the dangers of speculating on cryptocurrency bubbles.

See also: CoinGeek Live panel, Digital Currency & Global Compliance: Tools & Tips for Exchanges, Wallets & Other Service Providers