It may come as a surprise to lean China invests in blockchain tech with all the hype about the country’s ban on virtual currency. It is true that the world’s most populated nation is clamping down on cryptocurrency as it looks to limit speculation on in digital currencies. The move comes a year after Chinese authorities banned sales of Initial Coin Offerings (ICOs).
Recently, Chinese authorities stepped up their efforts in adding pressure on domestic cryptocurrency activities in the country.
In August, several government bodies, including the People’s Bank of China, issued warnings in risks from illegal cryptocurrency fundraising. Within the same month, tech giant Tencent announced it is prohibiting virtual currency transactions in its WeChat pay platform, and Beijing’s Chaoyang district banned all events for cryptocurrencies in its central business area.
Although China is taking a hard stand on digital currencies, the country continues to invest substantially in blockchain technology – the foundation for cryptocurrency. Since 2016 the Chinese government has invested approximately USD3.57 billion in the technology.
Blockchain creates a secure and permanent record of all data exchanges and digital assets between two parties. Any transactions performed are immutable from the blockchain architecture.
Another plus is that with its anonymity those that use cryptocurrencies for payments or blockchain applications/software for the exchange of digital assets, they are given the option of hiding their identity. The same privilege of anonymity is given to both the person making or receiving the transaction.
Cryptocurrencies effectively eliminates the reliance on intermediaries such as banks especially when it comes to payments and transactions. With its huge population, China fits as a perfect testing ground for blockchain tech in terms of scale.
Presently, several Chinese local governments have announced blockchain investments. This is evidence by leading blockchain investment and digital asset management from BlockVC that is reportedly financing close to 50 blockchain -related projects.
India May Also Be Set To Follow China’s Crypto Ban Style
In India, a similar model may be applied. The country is currently in the middle of a rift in which the Indian crypto exchanges are in legal battles with the Royal Bank of India. All banks were told by the government to cut all ties with any cryptocurrency firms while the government makes plans to regular crypto.
In a U-turn on the supposed draft that was due to be submitted earlier this year, the government has now been provided with a legal framework on how to ban cryptos from India altogether. The ban is unlikely to prevent citizens from trading in crypto, but they will not be able to exchange rupee for crypto or vice versa meaning the trading pair between India’s fiat currency and virtual currencies looks as if it is about to be wiped off the map.
At the same time, it is hard to see that India will ban investment in blockchain technologies. Much like China, the country will probably continue to allow blockchain solutions in the country.