China’s central bank has created a system to transfer paper checks to Blockchain. It took one year to develop the system, and in 2017 a prototype was successfully tested in a virtual environment. Paper business checks in China function like money orders, except that recipients can also exchange them with other entities read more
A vice governor of the People’s Bank of China Pan Gongsheng roughly commented on the situation with ICOs in the country, specifically those that had moved overseas but kept communicating with Chinese investors. Gongsheng reminded that ICOs, undercover ICOs and crypto asset trading are illegal in the Republic and represent illicit forms of fundraising and securities issuance.
"Any new financial product or phenomenon that is not authorized under the existing legal framework, we will crush them as soon as they dare to surface,” Pan said. Further, a Chinese state-owned messenger WeChat turned out to be contributing into the regulation by spotting crypto traders and limiting the amount of fiat currency such users can receive via the app.
China’s Ministry of Industry and Information Technology states that the domestic blockchain industry saw a fantastic growth last year.
178 new blockchain startups have been launched in 2017, which makes 465 in total. The notable progress is led by the improvement of the crypto regulation in China, and today the new sector is boosting the development of industries, helps bring down expenses and raise the efficiency. As an example of China generously funding the industry, last month the government of Hangzhou decided to invest more than $400 mln in a Hangzhou-based venture capital firm known as Tunlan Investment, to facilitate the growth of Blockchain startups and projects. To the publishment date, China has the most blockchain patents in the world.
Ebang Communication, a large Bitcoin mining hardware manufacturer based in China, applied for an initial public offering (IPO) with the Hong Kong Stock Exchange (HKEX) on June, 25.
Details on how much Eband is seeking to raise and what is the precise valuation of the company are still unknown. According to Ebang’s IPO application filing, they had earned $141 million in 2017 – almost 18 times more compared to 2016. The company is announcing the release of Bitcoin miners equipped with next-generation 7nm semiconductor chips, developed by Japanese tech conglomerate GMO and launched this spring.
For the first time, bitcoin mining projects have been added to the list of “unicorns” – a rating of privately owned companies valued over $1 billion.
Climbing up to the Top
Hurun Research Institute based in Shanghai published a report featuring 3 Chinese cryptocurrency companies: Bitmain is ranked 13th on the list since its value reached as much as 70 billion yuan (approximately $10.3 billion). Two other firms to be listed are Canaan Creative valued at $3 billion and Ebang worth circa $1.5 billion, which are at the 32nd and 53rd positions respectively.
Fan Wenzhong, the head of the International Department of the China Banking and Insurance Regulatory Commission, warned against “mythologizing” Blockchain during a fintech summit in Shanghai.
Wenzhong does not recognize the technology as a “revolution”, reminding that the concept of multi-entry bookkeeping has been around for centuries, and the earliest human transactions needed no centralized control, thus decentralization “is not a new trend”. However, the regulator admits the innovative aspects of Blockchain and its significant meaning.
A cryptocurrency mining malware had operated for 2 years not being noticed until now. The virus infected over a million computers in China and brought $2 million to its creators, according to a local news report.
Cybercriminals created and embedded the malware inside internet browser plug-ins they had previously developed for diverse purposes. The police of China’s Da Lan city arrested 20 suspects who had profited from mining on a large number of seized computers. Since minor cryptocurrencies require less power, the backend mining processes are quieter and are yet to be noticed by computer owners, which explains the longlasting crime's stealthiness.
People's Bank of China’s (PBoC) Digital Currency Research Lab is further extending its current research efforts to cities outside of Beijing to support the launch of fintech, including blockchain, ventures.
Supporting Real-Life Projects
The lab has partnered with the municipal government of Nanjing, the capital city of Jiangsu region, to open a fintech center in a move to develop and apply pilot programs with banks and academic organizations.
Researchers from one of the major universities in China reportedly have built up a decentralized exchange, not for crypto assets but rather for unused power.
Enabling Users to Trade Energy
In January, a group from China's Fudan University has filed a patent application, which was released last Friday, August 3. The document introduces the workings of an electricity exchange based on blockchain, that will assign power sellers and purchasers as nodes on the network and enable them to safely trade unused power without middlemen.
The China’s Ministry of Industry and Information Technology (MIIT) is seeking ways to step up blockchain adoption in the country.
Moving Forward with Blockchain
According to the MIIT, today the blockchain ecosystem is in its initial stage. In an effort to create a healthy development of the industry, they have proposed various measures to accelerate the promotion of blockchain apps in China.
China’s financial regulators are going to ban more than 100 foreign crypto exchanges that offer trading services to local investors.
Hunting Down Crypto Exchanges
Providing details, Shanghai Securities Times reported that the China National Fintech Risk Rectification Office has so far detected 124 trading platforms with foreign IP addresses, yet that are accessible in the country. The office intends to keep monitoring the space and
The National Fintech Risk Rectification Office is a government organization aiming to fight against money related risks like peer-to-peer loaning and cryptocurrency exchanging.
Сhinese regulators are fighting against announcements anyhow related to cryptocurrency, and giant mobile payment platforms WeChat Pay and Alipay declare to be collaborating with the government in the fight.
Taking Drastic Measures
Five regulatory organizations in China, including the People's Bank of China and the Banking Regulatory Commission, warned against any digital currency-related fundraising and exchanging operations.
A billionaire, a crypto-tycoon, and the biggest investor in blockchain projects Li Xiaolai said that he stops investing in Initial Coin Offerings (ICOs) and in any other blockchain projects. As Li Xiaolai is the most influential businessman in the Chinese crypto world, his name is associated with nearly 99% blockchain startups. He also advised users to ignore projects that have his name on it.
Large financial and technical entities Alibaba and IBM from China and the U.S. respectively are leading in the new top-list that ranks companies by the number of blockchain patents filed.
The World’s Leaders in Blockchain
iPR Daily, a Chinese media outlet focused on intellectual property, released a report showing the total amount of patents filed by each of the world leaders. It demonstrates that Chinese web giant Alibaba is at the top of the list with 90 blockchain patent applications.
IBM, an American technology company, has to date filed 89 applications, while Mastercard possesses third place with 80 patents. With 53 blockchain-focused patents, Bank of America made it to fourth place.
As an agency in charge of censorship on the Internet, the Cyberspace Administration of China (CAC) has revealed its plans for regulation of blockchain-related projects in the country.
Each and Every One
CAC published a draft policy on Friday and is expecting public feedback before the regulations enacted. If they take effect, the rules will apply to China-based startups defined as “entities or nodes” providing blockchain service to the public. These include both institutions and individuals that use the technology via desktop or mobile apps.