China proves a pragmatic approach to blockchain, cryptocurrency is the best course of action

Cryptocurrency prices have suddenly increased over the past week or so, and as has been seen in the past, talks of 1,000% rallies have started to fill the media pages. Given the fact that Bitcoin was developed to be a currency, not an investment tool, the true supporters of the Bitcoin ecosystem don’t place a lot of stock in the hype. China shares that sentiment, and as the country is beginning to truly embrace the digital revolution, it wants its citizens to avoid falling for the rhetoric and traps that have been seen. Viewing digital currency pragmatically is the best approach to long-term growth and stability.

China’s state-run media has been publishing articles on the state of crypto increases, as well as the government’s acknowledgment that blockchain is essentially the future. It wants investors to know that the endorsement does not equal support for Lambo-level prices with crypto and the People’s Daily news outlet stated this past Monday, “Blockchain’s future is here but we must remain rational. The rise of blockchain technology was accompanied by that of cryptocurrencies, but innovation in blockchain technology does not mean we should speculate in virtual currencies.”

As the country appears to be ready to blaze a path toward what could become a complete transition to digital, China’s central bank, the People’s Bank of China (PBoC), is reportedly going to certify 11 different hardware and software solutions that are associated with blockchain services and digital payments. That certification comes through a new endeavor launched by the PBoC, the Certification of Fintech Products (CFP), which is designed to provide strict guidance on how the digital Fintech industry will operate.

One of the 11 is a technology that is used to establish a “consortium blockchain network and verifying blockchain transactions in financial transactions use cases.” That is similar to descriptions of technologies for which Microsoft filed patent applications last year. Its goal is to improve the security, as well as the capacity, of solutions provided through blockchain services.

Data published (in Chinese) by the bank shows the first set of products that have been approved under the CFP. They include solutions for front- and back-end development for digital payment services, and more services will be added as the system progresses. The CFP is designed to cover virtually every aspect of the industry, including point-of-sale terminals, background applications and user software, as well as chips used in devices and security carriers.

Any offering that wants to be included in the Fintech space will have to be put to a rigorous test by the PBoC. Those solutions will have to pass a review of its protocol and inspections of facilities related to the solution’s development. Certificates will be issued for three years, at which time the entities will be inspected again in order to have their authorization renewed.

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