Development of Bitcoin and Blockchain in China
We cannot undermine the importance of China while talking about the nations that have an impact on the world economy. It has created a significant impact on the world. China has made its prominence felt on the global platform. Whether we talk about technological developments or science, China has made a mark on the global podium. The country is the epicenter of a lot of developments and Blockchain is the recent one. Ever since Bitcoin and Blockchain surfaced, the world is divided on their verdict related to the acceptance of the same. While most countries have embraced Bitcoin, China has never accepted this cryptocurrency. Lack of regulations, anonymity are two factors. These factors have kept China away from accepting this currency. But, there has been the latest development which has changed China’s opinion about the same. In this blog, we will be unfolding the development in China on Bitcoin and Blockchain.
Timeline: Growth of Bitcoin and Blockchain in China
Ever since Bitcoin came into existence, there has always been constant news buzzing around. Either on the factor of its growth or sustainability in the future. Bitcoin enthusiasts have been riding a roller coaster ride in China.
History of Bitcoin in China and recent developments
Long before Bitcoin came into the picture, China’s tech giant Tencent came up with Q coins. These coins were used for in-game purchases which later on expanded to the online and offline sale of real goods. The popularity of the same had risen so much that there were 100 million Chinese customers using Q coins. Post this, in 2009; the Chinese government declared Q-coins illegal.
The Rise of Bitcoin in China in 2013: In the last decade, Bitcoin has seen ups and downs in China, but in 2013, Bitcoin soared the height of success.
Here is how Bitcoin grew in China:
- Baidu: China’s search engine began accepting Bitcoin which was later joined by Alibaba’s Taobao.
- BTC China: One of the leading Bitcoin exchange in China became the biggest exchange global trading volume for Bitcoin.
All these developments led to the rise of Bitcoin that made its price rise as high as $1200.
But, later, it crashed. It came after the People’s Bank of China and four ministries and agencies shunted the digital currency acceptance.
After this Baidu also stopped accepting Bitcoin and all this culminated the Bitcoin value to fall by 20%.
Although China had outrightly advocated the ban on Bitcoin, BTC exchange found a way out. People could go ahead with exchange using some voucher system. Later two other exchanges in China, Huobi, and OKCoin allowed the users to wire money into their exchange accounts directly.
The world was constantly discussing Bitcoin and cryptocurrencies. But underlying technology, Blockchain started paving its way into the mainstream business operations. Unlike Bitcoin, China has always focussed on expediting work in the field of Blockchain. At the same time, Bitcoin also started to popularize in China. After 2013, it was the first time that Bitcoin’s price rose to as high as $ 952. This boom in China later led to the surge of several ICOs in China. As per the National Internet Finance Association of China, China-based ICOs raised around $400 million.
2017: The Bitcoin Ban
Chinese Central Bank declared ICOs illegal on September 4th, 2017.
The breakthrough in 2019
There are so much rise and fall in the field of Bitcoin and Blockchain. The recent news has buzzed the Chinese market that has led to the rise of Bitcoin again. It all began with Xi Jinping urging the country to speed up the process of Blockchain.
On October 28th, 2019
After the announcement, Chinese A-shares started to rise with daily gains of 10%. On the same day, the People’s Bank of China confirmed rolling out its currency and becoming the first central bank to issue digital currency. It will be called DCEP or Digital Currency Electronic Payment. After this announcement, the price of Bitcoin jumped to 12 %, reaching $8,392.
Canaan, (mining company in China) declared to conduct an IPO in the US.
Bitmain (cryptocurrency hardware manufacturer and mining pool operator) filed a confidential application for IPO.
The local government of China announced a 1 billion yuan Blockchain fund in Guangzhou. Every year this fund will choose two companies to develop no-coin public blockchains. The federated Blockchain will sponsor up to $1.4M and $425K subsidies. Besides, this fund also plans to subsidies companies that are providing Blockchain information services, local universities, dApps.
The National Development and Reform Commission of the People’s Republic of China (NDRC) that once propagated banning Bitcoin mining has dropped the decision.
As per IDC – a global market intelligence firm in China said that most of the Blockchain expenditure went to the banking sector. This growth of Blockchain use-cases in manufacturing retail and other professional servicing will make China invest more in Blockchain technology.
Quick Snap at the developments happening in China:
The recent enthusiasm in the Bitcoin and Blockchain in China has led to some significant developments in this field:
- After the announcement by Xi Jinping to expedite the developments in the field of Bitcoin.
- It led to the rise in the price of Bitcoin, which had risen to $8,392.
- Despite the ban on exchange in 2017, the recent statement by the Chinese president will do fine in the development in the field of Blockchain.
The way ahead-
The Chinese government has always been positive towards Blockchain technology. But, they have averted from cryptocurrency. China wants to control cryptocurrency. There have been enforced by regulators to protect its citizens from the financial risk of cryptocurrencies. Citizens of China can hold cryptocurrencies, but they cannot transact it. But with the recent announcement of Xi Jinping has made its impact in the world of Blockchain and Bitcoin.
The Blockchain and cryptocurrency go together. Hence, China cannot rule out the importance of Bitcoin. With the growing interest in the field of Blockchain, we can soon expect leading nations promoting Blockchain and its applications.
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