While cryptocurrencies continue to be banned in China, the People’s Bank of China (PBoC) has been actively researching in this field. The PBoC is the central banking authority in China. Up until now, the PBoC had only one digital currency research lab, which was based in Beijing. However, reports from China indicate that a new research center has now been set up in Nanjing, the capital of the Jiangsu province in Eastern China.
This is a rather interesting move from a country which has banned cryptocurrencies. Could this possibly mean that China is planning to either lift a ban on cryptocurrencies or at least relax their rules? Speculations are also pointing towards the fact that China might be working towards issuing a state backed digital currency as well - this has been something that the PBoC has been testing for a while now.
Reports from local news outlet CNstock indicate that the new research center has been set up in a partnership between the local municipal government, the Nanjing University, the PBoC’s Jiangsu branch, as well as the Bank of Jiangsu. This research center has been established by to bridge the gap between “politics, production, study, research and use”.
China has been one of the most hostile countries when it comes to cryptocurrencies. The country issued an outright ban on domestic cryptocurrency exchanges in mid-2017, which caused the biggest crash of last year. Since then, the country has been cracking down on various other crypto-related platforms as well as on miners.
China Plans on an Official Digital Currency
All of this ties back to China’s plans for an official digital currency. The country has been working towards introducing one for quite some time now. Reports from the country indicate that China is all set to start out with a trial of their legal digital currency starting with the city of Shenzhen - following which more cities are likely to be included under this trial.
In another move that indicates that Shenzhen is likely to be the first city where this blockchain trial would be carried out, the People’s Bank of China has officially flagged off their testing phase of a blockchain trade finance platform in Shenzhen. It would be interesting to see how this project fares in the country.
Of late, a number of countries have been trying their hands on a state-backed digital currency. The most notable of these are Venezuela, Iran and Russia - which intend to use these currencies to bypass the trade sanctions imposed upon them by the US. It would be interesting to see if China follows a similar path in the future.
China Eyes Blockchain Tech
Apart from their interest in developing a central bank backed digital currency (CBDC), China is also actively working towards developing blockchain technology integrations in the country. For quite a long time, China actively backed the NEO blockchain platform. Following that, the country is now showing an active interest in the likes of EOS and Ethereum - both of which are being used in various public-private partnership projects in the country.
Most major firms in China are working towards the deployment of blockchain technology in their day-to-day businesses. The government is also investing heavily into the use of blockchain technology in city management and administration when it comes to their smart city of ‘Xiongan’, which is the one of the key projects of China’s Xi Jinping.