Cautious Moves in Beijing Hint China On Verge of Crypto Revolution

A prominent Chinese politician, Wang Penjie, has proposed that China develop a national cryptocurrency trading platform.

Wang Penjie is a member of China’s top political advisory board, the Chinese People’s Political Consultative Conference (CPPCC).

A Chinese news outlet reported that Wang Penjie has suggested that the People’s Bank of China (PBOC) and the Chinese Securities Regulatory Commission (CSRC) create a blockchain and digital asset management “approval system.”

The system would be under strict guidelines and users of the platform would be subjected to a vetting process to confirm their real identities.

Wang Penjie also suggested that there should be greater investor education regarding blockchain technology.

“[A]fter sound domestic laws and regulations, under the unified cooperation of the Central Bank and the CSRC, a regulated, efficient and clean blockchain digital asset trading platform will be set up for enterprises to raise funds [and] trade digital assets,” reads the report.

One of Wang Penjie’s main arguments for supporting cryptocurrency and blockchain technology was to note the rising total market capitalization of digital assets such as Ethereum (ETH), Bitcoin (BTC), and Litecoin (LTC).

As January 2018, the market cap of those three coins exceeded that of Tencent, China’s biggest Internet provider.

He also mentioned new crypto regulations coming out of South Korea, and the fact that the Nasdaq is considering trading in Bitcoin futures, as proof that China must take cryptocurrency and blockchain technology seriously.

Obstacles

Wang Penjie was quick to note that blockchain might be an obstacle for China in particular.

“[A] lack of mature independent intellectual property rights […] will not be good for China’s financial security in the long run,” he said.

Penjie added that Chinese consumers might not be well informed enough to make smart decisions regarding digital assets, and that “unscrupulous elements dressed in ‘Blockchain’ garments, causing serious economic losses” could lead to “fraud.”

The change in position on crypto comes as a shock. Recent cryptocurrency news out of China has been largely negative.

The Chinese government has blocked foreign exchanges and banned initial coin offerings (ICOs) in September 2017.

One recent bright spot for cryptocurrency and blockchain technology came last week in the form of a full-page article, taken out in China’s official news outlet The People’s Daily. The newspaper is considered the mouthpiece of the Chinese Communist Party.

The article was supportive of blockchain technology, referring to it as “highly ingenious” and the next Internet.

Experts wonder if all this points to a change in China’s stance towards cryptocurrency and blockchain technology. To date, however, crypto remains unsanctioned by the Chinese government.

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