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Local Governments in China back Blockchain technology

As per recent reports, China is accelerating the adoption of blockchain technology even after financial authority’s decision to curb crypto trading and mining in the country.

The idea was to strengthen the publication of the master plan for the Xiongan New Area economic zone outside Beijing. A new fund has been launched with the aim to invest in blockchain-related projects.

Xiongan, was created in 2017 under the guidance of President Xi Jinping for the development of new technologies, including cognitive computing and blockchain. The government is focused on making the three counties in the northern province of Hebei – into a smart city.

The managing director at iBlock, the assembly of blockchain projects at the University of Illinois at Urbana – Champaign, Katt Gu, said, “Those two initiatives imply that more local governments in China are paying attention to blockchain technology.”

He further claimed that China is trying to use the high level of security provided by the distributed ledger technology in areas such as data storage, identity monitoring and authentication and financial services.

Blockchain can also be used to boost the trade finance services through smart contracts, a digital agreement which self-executes according to real-time events. The breakthrough technology can also be used in manufacturing by improving supply chain management.

On the other hand, Chinese regulators have launched strict regulations against Initial Coin Offerings and other activities related to the use of digital currencies. In September last year, China seized all operations related to virtual currency exchange, mining and ICOs. It made a lot of bitcoin traders flee to other crypto supporting countries.

Bank of China is also trying to embrace the blockchain technology which has been supported by few equity venture capitalists in China.

Angel investor and the co-founder of Beijing-based Goopal Group, Sun Jiangtao, said, “Some months ago, when equity investors had no sense of blockchain technology, we fell out of favor with start-ups. But when the regulators got a deeper understanding of blockchain and cracked down on ICOs, VCs and big companies found back their competitiveness.”

According to a Chinese-language blockchain information provider, 8btc, since November 2017 nine provincial-level governments in China have adopted the blockchain technology.

In another recent news, the capital of Zhejiang province in eastern China, Hangzhou, has announced its goal of investing about 10 billion yuan in a blockchain fund. It is possibly the largest fund in the world investing in blockchain projects.

As per the analysis by Reuters from the World Intellectual Property Organisation (WIPO), a total of 406 blockchain patents were filed in 2017 and half of them were from China.

Alex Batteson, the editor at Thomson Reuters’ Practical Law, said, “Companies are moving fast in order to protect their ideas in new areas of technological development — long before the technology actually goes to market.”

He further added, “Patents are also important for companies to attract all-important investment. Investors need to know that a business owns and can capitalize on the intellectual property and will not face interference from other parties claiming ownership.”

If China is successful in taming the blockchain technology, then it will probably gain an unbeatable edge over the rest of the world.

About the author

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Prateek Kulhari

Prateek is a business editor who writes about various topics such as technology, health and finance. At Pressly, he works along with the colourful folks that build a nation through tech startups. He is also a professional football player and video games enthusiast.