China’s relationship with crypto and the blockchain is complicated, with one tech investor claiming that it’s a “love-hate relationship.”
No Love Lost Over Crypto
Edith Yeung, head of 500 Startups’ China unit, was speaking to CNBC at East Tech West when she commented on the country’s tempestuous relationship with crypto and blockchain:
On blockchain and crypto, it’s really a love-hate relationship. The Chinese government has particular funds to invest in blockchain. What the Chinese government is not endorsing is the crypto part of things, which is challenging the fundamental of financial systems,.
It’s no secret that China isn’t a fan of the crypto market. Last September, the government took steps to ban trading and initial coin offerings (ICOs) in the industry, which, at the time, was one of the biggest players in the sector. As a result, mainland investors moved to overseas platforms to continue trading.
In February, it was reported that China was moving to eradicate cryptocurrency trading with a ban on foreign platforms. Then in August, Tencent’s WeChat announced the closure of several public accounts that delivered news and updates on the ecosystem. According to the report, they had violated China’s regulations for instant messaging services.
In between all this, China’s central bank, the People’s Bank of China (PBoC), has issued a warning to crypto investors.
China’s Love for Blockchain
While China remains set against the crypto industry, it is wholeheartedly embracing the underlying blockchain technology.
In May, it was reported that Tencent Holdings was turning to the blockchain to help the Chinese city of Shenzhen fight fake invoices and prevent businesses from taking advantage of tax loopholes.
Fellow internet giants, such as Baidu and Alibaba, are also turning to the blockchain. According to the China Internet Report, created by Yeung, China wants to be a leader in the technology. Shenzhen has already established a $500 million fund for blockchain investments whereas the Chinese city of Hangzhou plans to invest 10 billion yuan in a blockchain fund.
For Yeung, she thinks that blockchain companies have potential on the enterprise side. In the CNBC report, she said:
I was looking at a user case where they were trying to certify diamonds. Diamonds come from one place and you pass it (on) … you wanna make sure that it’s real jewelry for us. I think there is a lot of really practical use cases the whole world can use blockchain for.
Do you think China will eventually soften its stance toward crypto as it delves deeper into the blockchain? Let us know in the comments below.
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