June 25, 2024
By Sharan Kaur Phillora
In a significant revelation, a senior Chinese official has claimed that approximately 25,000 blockchain companies in China may have attempted to issue their own cryptocurrencies. This figure represents about 89% of the country’s blockchain firms, according to Yedong Zhu, president of the government-backed Beijing Blockchain Application Association.
Here’s what we know
The disclosure came during the launch of the “Bluebook of Blockchain,” a joint publication by five Chinese financial and technology authorities, including the central bank. This report exposes illegal and fraudulent schemes within the blockchain sector and is one of three “bluebooks” guiding Chinese regulators on fintech industry oversight.
The announcement comes amid China’s ongoing struggle to balance its enthusiasm for blockchain technology with its strict stance against cryptocurrencies. In 2017, China banned Initial Coin Offerings (ICOs), and in September 2021, authorities announced a sweeping prohibition on all crypto transactions and mining, causing significant market turbulence.
Despite these measures, only 4,000 firms, or 14% of the total, are reportedly focused solely on legitimate blockchain applications. The majority of these companies are concentrated in the southern Guangdong province, with others primarily based in Beijing and Shanghai.
Chinese authorities have intensified their crackdown on prohibited financial activities related to ICOs and crypto trading. Major cities have implemented inspection plans aimed at shutting down any remaining crypto exchanges. However, recent reports suggest that some Chinese investors, disillusioned with the stock market, are still finding ways to invest in banned cryptocurrencies like Bitcoin.
This situation highlights the challenges China faces in regulating the burgeoning fintech industry. While the government maintains a hard line against cryptocurrencies, it simultaneously promotes blockchain technology development under strict oversight.
As China navigates this complex landscape, the global crypto community watches closely. The actions of the world’s second-largest economy continue to have significant implications for the future of blockchain technology and cryptocurrency adoption worldwide.
About the author
Sharan Kaur Phillora’s thirst for knowledge has led her to study many different subjects, including NFTs and Blockchain technology – two emerging technologies that will change how we interact with each other in the future. When she isn’t exploring a new idea or concept, she enjoys reading literary masterpieces.
