Is China the ‘Sleeping Giant’ of Blockchain Technology?
As recently as last September, the People’s Bank of China announced an immediate ban on Initial Coin Offerings (ICOs) — a method employed by blockchain startups to fund development — and cryptocurrency exchanges in the country. However, last month, China’s main government-controlled broadcaster, China Central Television (CCTV), made what has been its biggest endorsement of blockchain technology so far by claiming that “the value of blockchain is ten times that of the internet”, with the Chinese State Council reportedly embracing blockchain technology in its 13th Five-Year plan.
With policymakers around the world — including Chinese policymakers — eager to be early adopters of this revolutionary technology while still erring on the side of caution and being regulatorily compliant, what might the future hold for blockchain technology in this celestial empire?
Because of the rate of growth in which blockchain technology has grown in China, it was inevitable that China would have little choice but to accept its adoption. There has been a lot of uncertainty over the years — a dark web if you will — and this news from President Xi has proven that China will continue to lead the way in innovation and accelerate the industry adoption of blockchain. Blockchain has created hundreds of thousands of new jobs in China and those jobs are here to stay.
When you work in the blockchain space in China, it feels like everyone outside of China is working in slow motion. Opportunities are identified immediately and needs are addressed overnight with new services and solutions provided. New money prevails, acts fast, comes in great volume, and deals often depend on reputation, relationship and trust.
It isn’t so much that the Chinese stance has been anti-blockchain; its actions so far have shown that it has been anything but — the launch of the Trusted Blockchain Open Lab by China’s Ministry of Industry and Information Technology, and the acknowledgement of a World Economic Forum whitepaper entitled ‘Realising the Potential of Blockchain’ by officials at the Annual Meeting of the New Champions in Dalian in June 2017, indicate it is very much for the integration of the technology into key industries in order to further cement its place as an economic powerhouse. While China has seemingly adopted an anti-cryptocurrency stance, its attitude towards blockchain as a technology is resoundingly receptive.
According to data collected by Thomson Reuters from the World Intellectual Property Organisation (Wipo), China was the most active filer of blockchain patent applications in 2017, accounting for more than half of the 406 blockchain-related patent applications filed. While patent applications for blockchain trebled, applications related to cryptocurrencies only grew by 16 percent, illustrating the discrepancy in receptiveness to the technology versus its most popular use case, cryptocurrencies.
China reportedly favouring ‘deintermediarisation’ over ‘decentralisation’ demonstrates its reluctance to accept rudimentary ideas associated with blockchain technology, including the idea of the free movement of assets without governmental control. There can be many intermediaries, but only one centre, and this play on words demonstrates that although it is willing to accelerate its position by adopting blockchain technology, it is not as prepared to compromise on its dystopian position of authority.