Cryptocurrency Regulations In China Could Soon Be Loosened
According to an editorial that appeared in a Chinese newspaper, Global Times, authorities have recognized that banning virtual currencies may not be the solution but rather what is required is embracing the technology while tightening regulations. This would mean taking an approach that countries such as South Korea, Japan and the United States. The reports come months following the ban on Initial Coin Offerings and the trading of digital currencies in China.
Earlier in the year officials from the central bank of China paid visits to the major digital currency exchanges in the country such as Huobi. It is believed that the officials engaged the executives of the crypto exchanges in discussions and this led to speculation that the ban might be lifted. The chief operating officer of Huobi, Zhu Jiawei, however poured cold water on the rumors though this did not make them go away.
According to the Global Times editorial part of the reason why tighter regulations would be preferred to outright bans is the fact that it is impossible to end the trade in digital currencies. Additionally the most populous country in the world could end up being left behind with regards to the virtual currency revolution.
Despite the ban on digital currencies China has been supportive of the technology underlying cryptocurrencies – blockchain. The Chinese government has emphasized investment in technologies such as blockchain, internet of things, mobile communications, quantum computing and artificial intelligence with a view to becoming a global technology leader. In the thirteenth 5-year economic plan which was launched in 2016 blockchain technology is mentioned two times.
According to Startup Genome China now leads the world with regards to patent applications in blockchain technology. Per Startup Genome the reason for the high number of blockchain patent applications in China was due partly to the active government support. While the United States had been leading with regards to the number of blockchain patents China overtook the world’s biggest economy in 2015 and has been the leader since then.
Last month the CCID – China Center for Information Industry Development unveiled a monthly ratings index for 28 virtual currencies and the blockchain technologies they were built on. The initiative by the CCID was launched due to the fact that there wasn’t an existing independent analysis of blockchain and cryptocurrencies that could act as a guide for research institutes, enterprises and governments across the globe. In the inaugural rankings Ethereum (ETH) was in the first position while bitcoin (BTC) was in the 13th position.