China’s cryptocurrency and blockchain appreciation continue as Xinhua, another state-run media organization publishes a full article about bitcoin. Some commentators opine that the flurry of positive digital currency sentiments in the country is part of Beijing’s efforts to normalize the industry before introducing the proposed digital RMB.
Despite these positive signs, trading and initial coin offerings (ICOs) remain banned. However, there appears to be a movement towards nationalizing the Chinese crypto space. Such a move might prompt a response from state actors in the West to adopt more crypto-friendly policies or risk losing out to China in the race for control of the emerging digital landscape.
Xinhua Says Bitcoin is First Successful Blockchain Application
Xinhua on Monday (November 11, 2019) printed an article providing a summary rundown of bitcoin. Titled “Bitcoin: The First Successful Application of Blockchain,” the piece detailed several aspects of the top-ranked cryptocurrency including mining, the maximum supply of 21 million, and halving to mention a few.
Chinese state newspaper today (Xinhua)
— Matthew Graham (@mg0314a) November 11, 2019
The article also mentioned price fluctuation and the energy consumption of the mining process. An excerpt from the piece reads:
“First of all, bitcoin is not a tangible currency. It is produced and operated on the internet. It is an open source P2P (Peer to Peer) digital ‘currency…’ Bitcoin is the first successful application of blockchain technology.”
Factual Errors and Inaccuracies
The article did contain a few errors and inaccuracies in its characterization of several aspects of bitcoin. One particular instance of such false information reads:
“The identity of the account holder will not be known to anyone… This feature also makes bitcoin widely used in illegal transactions such as money laundering. Currently, the most important use of bitcoin payments are black market transactions and ‘dark net’ transactions.”
The above portion is part of the article’s narrative that attempted to paint bitcoin as an anonymous currency. For one, BTC isn’t anonymous as there are several means of identifying the ownership of wallets and addresses.
Furthermore, exchanges have been forced to adopt robust know your customer (KYC) compliance by national and international financial regulators. Countries like South Korea have also banned anonymous trading.
This traceability of bitcoin transactions has also aided law enforcement agencies in apprehending criminals who use BTC and other cryptos. Police authorities and other security agencies in several countries have also issued reports showing that crypto isn’t as popular as cash for criminal organizations.
Whether it be money laundering, drug trafficking, or terrorist financing, cash remains the de facto financing vehicle. The top-ranked cryptocurrency is also something of a relief for people affected by deteriorating economic conditions in their country.
China’s Growing Crypto and Blockchain Appreciation
In a separate publication by Xinhua, the publication forecasted that China’s blockchain spending could surpass $2 billion by 2023 based on a study by IDC — a global market intelligence firm. According to IDC’s research, China’s blockchain expenditure will experience a compounded annual growth north of 65% within the next four years.
Back in October 2019, China’s President Xi Jinping declared that blockchain will become a core technology in the country. So far, IDC says the bulk of China’s blockchain efforts have focused on the banking, manufacturing, and retail sectors.
Such is the positive enthusiasm surrounding blockchain that authorities in Beijing have forbidden any negative publication about the technology. Since then, numerous media platforms including The People’s Daily — the official media service of the Chinese Communist Party, have published positive articles about the technology with The People’s Daily describing blockchain as the breaking point that will China overtake the rest of the developed world.