Guiyang—On May 26, 2018, a Chinese State TV broadcast told viewers nationwide that blockchain would become ‘the second era of the internet’ and that its value concerning revolutionary technology could be ‘ten times that of the Internet.’ Hyperbole aside, the underlying message is clear – China is ready to throw itself into the adoption of blockchain and now appears to endorse the technology fully.
The program consisted of an hour-long panel discussion from government officials and crypto experts, among them Canadian, Don Tapscott, who authored the book ‘Blockchain Revolution,’ and Zhang Schoucheng, professor of Physics at Stanford University and founder of Fintech venture capital firm, Danhua Capital.
Blockchain can immediately bring tangible benefits
Televised live from the second annual China Big Data Expo in Guiyang, the show explores the manifold uses and benefits of blockchain technology. Toronto resident, Don Tapscott, relates an anecdote about his housekeeper, who he says used to pay 15% fees on transfers to her mother in the Phillippines that would take a week to finalize. Now, he says, she sends it directly from mobile to mobile and completes the transaction in minutes.
So to consider for China, a powerhouse who seeks to become an economic giant to rival the USA, this is a concept that will bring great optimism to businesspeople — the adoption of blockchain could make both domestic and international trade almost seamless. One can only imagine how attractive this might be to the rapidly growing economy which, although finding most of its export market in nearby Asian countries, continues to trade with the United States significantly more than any other individual nation. The ability to conduct cross-border transactions securely, quickly, and with far-reduced costs would stand to benefit China massively.
Will China eventually develop a cryptocurrency?
Although they are not exactly rushing to develop a digital currency to rival payment systems such as Bitcoin, it has been dubbed ‘technologically inevitable’ by the head of the People’s Bank of China (PBoC), Zhou Xiachuan, following a move by authorities to eliminate all cryptocurrency trading earlier this year.
The Chinese government had already banned domestic Bitcoin exchanges in late 2017, and in a further blow to Chinese Bitcoin investors, they restricted access to foreign exchanges earlier this year (mainland investors do, however, remain bullish and many have moved operations to Hong Kong and Japan).
This should be of little surprise to investors: a currency that operates outside of government regulation was always going to catch the attention of the Chinese authorities, who typically prefer to know what its citizens are up to — to put it lightly. This means that any involvement in blockchain from China should be expected to focus less on free asset movements and decentralization.
What they are more interested in are the untold benefits brought by disintermediation, the concept which saw benefits for Don Tapscott’s housekeeper: if you remove the middleman and streamline the process, things will move faster, and you will pay less.