China Signals Further Support for Blockchain Technology

Asia Blockchain Review
April 16, 2019

Technology was on the agenda at China’s annual Two Sessions political event, held in March at the Great Hall of the People in Beijing, with discussions covering topics such as blockchain and cryptocurrency, accompanied by calls for a strict, efficient and clear regulatory framework.

Regarding non-currency blockchain applications, representatives were keen to focus on areas which would likely receive state backing. The Communist Party of China (CPC) has been cautious in its approach to digital assets but has shown increasing support for other uses for blockchain technology.  

Meanwhile, blockchain-based firms have been particularly mindful of state policy so as to ensure their activities remain safely within acceptable legal parameters, while also wanting to be privy to opportunities for government subsidies and support.

Crypto regulations in China are still expected to be strictly enforced for the foreseeable future, but greater clarity could provide options in certain areas. Financial institutions are currently prohibited from dealing with crypto assets such as Bitcoin, but cryptocurrencies themselves are not banned. Additionally, while the prevailing sentiment is to stringently supervise digital assets and ban asset trading, limited moves towards regulating the sector can still be expected.

Cryptocurrencies remain one of the most active areas for fintech innovation in China, with terms like “blockchain” often substituted with “fintech” and “financial innovation” due to political sensitivity.      

Most of the proposals raised at the Two Sessions event revolved around the supervision and application of blockchain technology, with the latter clearly being the most key concern among representatives. Possible applications included smart cities, governance, environmental protection, health, food safety, supply chain financing, credit information, charity, and intellectual property.


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