Calls For Digital Currency Regulation In China Grow

One of China’s biggest state-owned newspapers, Global Times, has called for enhanced regulation of cryptocurrencies in the country rather than an outright ban. This has sparked speculation that the government of China may revisit the ban that was imposed on trading of digital currencies.

Earlier this year a ban on both foreign and local digital currency exchanges as well as Initial Coin Offering websites was imposed by People’s Bank of China and since then contradictory signals have emerged concerning the future of virtual currencies in the world’s second biggest economy. Three months ago for instance the governor of the Chinese central bank, Zhou Xiaochuan, delivered a speech which seemed to suggest that regulators were viewing virtual currencies as a phase that couldn’t be avoided with regards to evolution of money.

Xiaochuan argued that replacing paper money and metal coins with digital currencies could not be avoided. The governor of the People’s Bank of China further disclosed that the financial institution was taking a hard look at Bitcoin (BTC) as well as other virtual currencies with a view to launching its own virtual coin in the future.

At the same it was also revealed in the same month that the crackdown on virtual currency trading by Chinese regulators had extended to the blocking of social media accounts that were associated with trading platforms.

Despite the ban on Initial Coin Offerings and virtual currency exchanges in China, it is estimated that most of the mining of Bitcoin takes place in the world’s most populous country. Last year it was estimated that between 50% and 70% of the mining activities of Bitcoin in the world takes place in China. The figures are thought to have been higher prior to the wave or regulatory suppression.

Though China has taken a harsh stance on virtual currencies it has embraced blockchain technology and has even been included in the country’s five-year development plan. Late last month the president of China, XI Jinping, mentioned blockchain technology as one of the most important alongside internet of things, mobile communication, quantum computing and artificial intelligence.

Just like in the mining of digital currencies China also leads the world with regards to blockchain technology patents. The most recent statistics from the World Intellectual Property Organization shows that last year the world’s second biggest economy filed 225 patents out of a total of 406 patents filed the world over. This was approximately 55% of all patents.