- Beijing is launching a research center to advance China’s blockchain and Web3 sectors, focusing on applications beyond digital currencies
- The research facility aims to develop a national blockchain network, connecting existing Chinese blockchains such as ChainMaker, and fostering cross-chain development
- As China enforces strict regulations on cryptocurrencies, Chinese digital asset firms have sought alternative solutions by relocating their operations to Hong Kong
In a groundbreaking move, Beijing is establishing a state-of-the-art research facility dedicated to advancing China’s blockchain and Web3 sectors. Sponsored by the Chinese Ministry of Science and Technology, the center will join forces with universities, tech firms, and research organizations to explore blockchain applications beyond digital currencies.
Although blockchain technology is frequently linked to digital assets, China has imposed strict regulations on cryptocurrencies, even prohibiting crypto trading in 2021. As such, the new initiative seeks to promote the broader potential of blockchain technology rather than its use in the digital asset arena.
According to the South China Morning Post, the research center aims to cultivate a new generation of blockchain specialists and develop a national blockchain network. By connecting existing Chinese blockchains, this network will facilitate cross-chain collaboration.
One such Chinese blockchain is ChainMaker, also known as the Chang’An Chain. Developed by the Beijing Academy of Blockchain and Edge Computing, ChainMaker is an open-source platform backed by a government-supported research institute that will play a pivotal role in the upcoming research center.
Meanwhile, Chinese digital asset firms have been exploring bypassing the country’s stringent cryptocurrency restrictions. Despite the difficulties in enforcing a total ban on crypto trading, interest among Chinese citizens remains strong.
China on CBDCs and Blockchain Projects
The Chinese government has been actively testing its central bank digital currency (CBDC), the e-CNY, which has shown promising results in various sectors nationwide. Initially used as a payment method for transportation, the e-CNY is gradually expanding its reach to include commercial applications. This digital currency aims to provide a secure and efficient transaction means, strengthening China’s financial infrastructure.
Despite the government’s strict regulations and negative stance on cryptocurrencies, it has embraced the broader potential of blockchain technology, recognizing its value in improving business processes and fostering international collaboration. Numerous large corporations in China are exploring new blockchain projects to streamline operations and simplify interactions with foreign businesses. By leveraging the power of distributed ledger technology, these companies can enhance transparency, security, and trust, making cross-border transactions more seamless and efficient.
This apparent contradiction in China’s approach to cryptocurrencies and blockchain projects showcases the government’s strategic focus on harnessing the benefits of advanced technologies while maintaining control over the nation’s financial ecosystem. As the country continues to develop its CBDC and support innovative blockchain initiatives, the Chinese economy will likely become increasingly interconnected and competitive on the global stage.
A popular strategy for some companies has been to shift their operations from mainland China to Hong Kong. In contrast to Beijing’s stringent policies, Hong Kong has cultivated a supportive atmosphere for cryptocurrency businesses, enticing numerous prominent crypto firms to establish offices in the city.
