Posted 1 year ago | by Ben Armstrong
China is Talking Cryptos, but They Aren't HODLers
It looks like China is starting to take cryptocurrency seriously at a state level.
Zhou Xiaochuan is the former, longest-serving governor of the People's Bank of China (PBoC), and also considered by many to be an elder statesman. Xiaochuan recently had a 30 minute talk with TV show China Friday on “Digital Currency Challenges Global Financial Infrastructure and Management”.
Many people are speculating that Zhou Xiaochuan’s talk, is the central party's way of informing the public that China will issue own state-bank digital currency. His speech also revealed plan by the PBoC to design a Central Bank Digital Currency (CBDC).
According to Zhou, local government users and exchange users are at odds usually in international remittance.
“Many countries regulate capital outflow, many have issues with capital inflow, and also, when it comes to exchanges, there’s a global issue of coordination.”
New Ideas in Tokens
Whether it’s Facebook’s Libra or the PBoC’s CBDC, any crypto solution will be challenged by other nations, or the users themselves.
“PBoC will focus on the domestic market. China will not legitimize any private sector crypto projects. Maintaining control is core to PBoC’s crypto scheme.”
On the face of it, a PBoC CBDC seems like a hard sell to the global crypto community. The Chinese government can make its citizens use just about anything, but otherwise, it seems like a project that will only work with some serious international incentives.
China's Crypto Culture is Hot!
Here are a few things that happened in China last week:
#1: Jihan Wu confronted Micree Zhan
Micree Zhan, the co-founder, CTO and largest shareholder of multi-billion-dollar mining company Bitmain, was ousted in a coup led by his co-founder Jihan Wu. After Wu took control of the company, Micree stated that he will retaliate via legal action.
Bitmain filed in the U.S. for an IPO, got an early step to its next biggest competitor, Canaan Creative. Dr.Zuoxing Yang, one of the important devs at Bitmain left to be CEO of rival MicroBT, and was arrested on charges of IP Theft.
#2: Hong Kong's Crypto Exchanges see Setbacks
In the protest-ravaged Hong Kong the Securities & Futures Commission of Hong Kong (SFC) issued new rules on Nov 6th that will govern exchanges via licenses and mandatory enrollment in a regulatory framework.
According to Reuters, many exchanges welcome the idea, but few are making the move to adopt the regulations proactively. For smaller exchanges, the license means that they can’t operate with retail investors, who account for most of their revenue.
Other requirements impose extra overhead on their business model. As of the writing of this article, OSL is the first and only—exchange to apply for the license.
#3: BAT Race
At the recent World Blockchain Summit in Shanghai, three massive tech companies in China - Baidu, Alibaba and Tencent (BAT), gave a keynote speech about its combined blockchain strategy. BAT is officially in the race to develop and commercialize blockchain technology.
Permissioned blockchains, trust-based society, financial inclusion, and blockchain-based cloud infrastructure were all hot topics at the World Blockchain Summit this year.
There is a lot going on in the blockchain space, and it looks like there is a major pivot to China underway. Even if Hong Kong's chances of becoming a crypto banking hub are destroyed, Singapore will remain a viable option.