As soon as China's premier, Xi Jinping, proclaimed support towards Bitcoin's underlying technology in a speech on October 25, the People's Republic jumped on the blockchain wagon, and it hasn't stepped off since.
Nowhere is China’s newfound enthusiasm for blockchain more apparent than in state media, with the People’s Daily, the official media outlet of the CCP, publishing a commentary describing blockchain as "a breaking point for China to overtake.” The People’s Daily was, however, at pains to differentiate blockchain technology from cryptocurrency speculation, noting that blockchain should not be used to “hype up aircoins” and that “inclusive and prudent regulation” that “prohibits transgression” should be adopted.
Speculation reaches fever pitch
The state media outlet’s stance unsurprisingly mirrors earlier reports that officials were concerned at the prospect of a speculative cryptocurrency bubble around China’s blockchain push.
They have ample reason to be alarmed; rumors around crypto are spreading like wildfire in the country. Already, there have been unverified reports of the legalization of crypto exchanges in China. Last week the crypto community erupted into a fervor of excitement as a leaked screenshot allegedly depicting a Chinese "cryptocurrency trading license" came to light.
This was later debunked by Dovey Wan, partner at Primitive Ventures, who schooled the community on China's corporate law. She asserts that the “leak” was nothing more than a "generic business license," and that there was no such thing as "cryptocurrency exchange legalization" in China.
Blockchain-based smart cities
Regardless of the spread of cryptocurrency speculation, China is clearly enthused about the prospects of blockchain technology—for the time being.
Over the last week, local governments in China have tapped into official enthusiasm for blockchain with a plethora of initiatives. According to the Xinhua News Agency (via Global Times), China has created an blockchain-based identification system for its cities. Developed by three institutes in Shijiazhuang city, the system will purportedly roll out nationwide, with each city eligible to apply for their own unique ID code since Sunday.
This code will link cities within the ID system, enabling data sharing and interconnectivity between provinces.
China likes this idea so much, it intends to foster the development of 100 smart cities by 2020, much of which will likely be underpinned by blockchain tech.
However, China's budding relationship with blockchain looks to be every bit as antithetical to traditional decentralized ideals as one would expect.
Zhang Chao, one of the developers of the smart city system, explained that it would be "independently distributed and managed by China, with a unified distribution rule, a resolution of distributed storage and tamper-resistant code."
The smart city ID system is just one of the projects currently underway in China’s blockchain renaissance, from DeFi applications to the country’s proposed national digital currency. As Decrypt reported, a new government initiative has seen a 1 billion RMB ($150 million) pot opened for "outstanding blockchain projects." Guangzhou, clearly heeding the call of Xi, plans to support two public or private-based blockchain projects per year. When will the fervor end?