China’s relationship with crypto and the blockchain is complicated, with one tech investor claiming that it’s a “love-hate relationship.”


No Love Lost Over Crypto

Edith Yeung, head of 500 Startups’ China unit, was speaking to CNBC at East Tech West when she commented on the country’s tempestuous relationship with crypto and blockchain:

On blockchain and crypto, it’s really a love-hate relationship. The Chinese government has particular funds to invest in blockchain. What the Chinese government is not endorsing is the crypto part of things, which is challenging the fundamental of financial systems,.

It’s no secret that China isn’t a fan of the crypto market. Last September, the government took steps to ban trading and initial coin offerings (ICOs) in the industry, which, at the time, was one of the biggest players in the sector. As a result, mainland investors moved to overseas platforms to continue trading.

In February, it was reported that China was moving to eradicate cryptocurrency trading with a ban on foreign platforms. Then in August, Tencent’s WeChat announced the closure of several public accounts that delivered news and updates on the ecosystem. According to the report, they had violated China’s regulations for instant messaging services.

In between all this, China’s central bank, the People’s Bank of China (PBoC), has issued a warning to crypto investors.

No Love Lost Over Crypto

China’s Love for Blockchain

While China remains set against the crypto industry, it is wholeheartedly embracing the underlying blockchain technology.

In May, it was reported that Tencent Holdings was turning to the blockchain to help the Chinese city of Shenzhen fight fake invoices and prevent businesses from taking advantage of tax loopholes.

Fellow internet giants, such as Baidu and Alibaba, are also turning to the blockchain. According to the China Internet Report, created by Yeung, China wants to be a leader in the technology. Shenzhen has already established a $500 million fund for blockchain investments whereas the Chinese city of Hangzhou plans to invest 10 billion yuan in a blockchain fund.

For Yeung, she thinks that blockchain companies have potential on the enterprise side. In the CNBC report, she said:

I was looking at a user case where they were trying to certify diamonds. Diamonds come from one place and you pass it (on) … you wanna make sure that it’s real jewelry for us. I think there is a lot of really practical use cases the whole world can use blockchain for.

Do you think China will eventually soften its stance toward crypto as it delves deeper into the blockchain? Let us know in the comments below

This post is credited to livebitcoinnews

China and Japan’s power struggle is good news for Southeast Asia?

The Japan-China rivalry in Southeast Asia is good for the economic development and strategic autonomy of Southeast Asian states. This is particularly so for the poorer countries of the region that harbour the greatest fears of becoming solely dependent on China.

China and Japan are fully engaged in a strategic rivalry for influence in Southeast Asia with infrastructure financing as one of the major bases of competition. Cambodia is one of the most willing partners of Chinese leader Xi Jinping’s Eurasia-spanning Belt and Road Initiative. All Southeast Asian countries are founding members of the China-led Asian Infrastructure Investment Bank, while Japanese Prime Minister Shinzo Abe’s Partnership for Quality Infrastructure initiative is focussed on Southeast Asia and India. In 2016, all ten Asean states received Japanese aid, even oil-rich Brunei and Singapore. Vietnam, the region’s most reluctant partner in China’s Belt and Road Initiative, received over half of the $3.17 billion Japan gave in aid to the region that fiscal year — over four times more than Thailand, over 15 times more than Cambodia and over 30 times more than Laos.

Fortunately for Southeast Asia, post-war Japan has seen the region as its key economic and strategic hinterland. Japan remains the largest source of foreign direct investment and official development assistance, in stock and flow terms, in developing Southeast Asia. Speaking of which… Japan’s Shinsei Bank has signed a Memorandum of Understanding (MoU) with blockchain startup ConsenSys to widen its exploration of the technology’s applications for finance.

According to an English-language press release published the same date, the MoU entails a business alliance between Shinsei Bank, Hong Kong-based restricted license bank Nippon Wealth, Singaporean private equity fund Tribay Capital, and ConsenSys. The latter was founded in 2014 by Ethereum (ETH) co-founder Joseph Lubin, and is currently headquartered in New York.

Blockchain is becoming a key focus of Japan’s traditional financial sector, with multinational IT firm Fujitsu announcing late October its plans build an interbank settlement platform using blockchain technology as part of a joint project with nine domestic banks.

HOW ABOUT CHINA? 

Throughout the past 24 hours, several publications and public figures have misreported that China has put an end to its blanket ban on bitcoin and the cryptocurrency exchange market.

In October, as CnLedger, a trusted news source in China reported, the Chinese court confirmed that Bitcoin is protected by law as property. As such, individuals, businesses, and merchants can technically utilize cryptocurrencies like Bitcoin and Ethereum as a payment method without conflicting with local regulations.

Giving a peace on mind… There are still lots of blockchain development catching up to bring heat into Southeast Asia.

This post is credited to coins300

China’s central bank the People’s Bank of China (PBC) encouraged the government to increase supervision of blockchain-related ventures in a working paper released on Tuesday, warning that “bubbles were apparent,” according to Reuters.

‘Cannot Disrupt the Market’

The abstract of the paper, entitled ‘What Blockchain Can Do, and What it Can’t Do’ states the approach the PBC’s Research Bureau took in dissecting blockchain technology and examining it from an economic perspective, stating:

“…by explaining blockchain technologies from an economic perspective, it introduces the Token Paradigm to summarize mainstream blockchain systems, discusses the true meaning of consensus and trust in the blockchain field, and analyzes the functions of smart contract [sic].”

Translated excerpts from the working paper via CCN China show a pessimistic view of blockchain technology, especially as the disruptor to the financial system crypto supporters claim it will be. The report warns readers not to “exaggerate the function of the blockchain,” adding, “So far, no technological innovation has had a disruptive impact on the financial system, and blockchain is no exception.” 

The PBC also issued a notice to investors in September warning of the risks involved with cryptocurrency, and the new working paper calls blockchain “superstitious” according to translations. The paper asserts that there is no flexibility in the supply of digital currencies and that a lack of intrinsic value support is also a problem.

Still Exploring Crypto

The paper does indicate that there are some places within China’s financial structure where blockchain technology could be helpful if applied, specifically noting the country’s digital bill trading platform. Still, the PBC says it’s “very difficult to replace institutions and trust with technology.”

Despite calling blockchain enthusiasm “superstitious” and saying that it would only be possible to completely replace the current financial system with a crypto-based on in a utopian scenario, the PBC does appear to have its hand in crypto projects of its own.

China: Central Bank May Launch State-issued Cryptocurrency, Seeking Cryptography Talent
Related: China: Central Bank May Launch State-issued Cryptocurrency, Seeking Cryptography Talent

CryptoSlate reported in October that the PBC is hiring several new employees with backgrounds in cryptography, computer science, and finance to develop its own “digital fiat currency.” The bank, in fact, sought out those with blockchain experience to fill these roles, as well as people with a background in big data.

Early last month, a researcher at the PBC published an op-ed in the bank-owned CN Finance magazine calling for more research into a government-backed stablecoin pegged to the Yuan, saying that U.S. stablecoins pegged to the dollar showed promise.

This post is credited to cryptoslate