January 10, 2025
By Our Correspondent
Blockchain technology, encryption, and smart contracts are poised to establish a reliable data circulation system as part of China’s ambitious national digital infrastructure initiatives.
China has outlined plans to leverage blockchain and smart contracts to achieve its new objectives, with recent guidance highlighting blockchain as a fundamental component of its future aspirations.
The “Guidelines for the Construction of National Infrastructure,” recently issued by China’s National Development and Reform Commission (NDRC), indicate that the country will commence pilot projects for various data infrastructure technologies by 2029.
Specifically, the aim is to develop a cohesive and trustworthy framework for data assets and transaction certificates. The guidelines also emphasize applications related to digital identity, data traceability, privacy, and security.
During a press conference, Zhulin Shen, deputy director of the National Data Administration, stated that the data infrastructure initiative could attract approximately 400 billion yuan, equivalent to around $54.5 billion, in annual investments over the next five years.
Furthermore, the guidelines actively promote the involvement of “industries and local governments” in the development of new technological infrastructure, including “blockchain networks and privacy-protecting computing platforms.”
China is well-acquainted with blockchain technology and is increasingly integrating it into its Belt and Road Initiative, as well as for trade and economic collaborations among BRICS member nations.
Since 2017, China has openly adopted an anti-cryptocurrency stance while promoting blockchain technology.
Although it hosts one of the world’s largest Bitcoin mining companies, Bitmain, which produces the Antminer, the Chinese government effectively prohibited all cryptocurrency-related activities in 2021.
A recent court decision has clarified that individuals are not barred from holding cryptocurrencies. Nevertheless, commercial activities involving cryptocurrencies, including initial coin offerings (ICOs), trading, and mining, remain illegal.
Despite announcing a halt to all business operations following the 2021 ban, Bitmain continues to operate.
The means by which companies like Bitmain persist in their operations remains uncertain, yet individual users are exploring alternative methods to engage in cryptocurrency trading.
Research from Chainalysis indicates that over-the-counter (OTC) trading desks in China are expanding, with nearly $50 billion in transactions recorded in the first and second quarters of 2024.
Cryptocurrency enjoys significant popularity in China, and Hong Kong’s recent initiative to embrace cryptocurrency, along with its approval of spot Bitcoin and Ethereum exchange-traded funds (ETFs) in 2024, may potentially influence policy changes in mainland China, although such a shift seems unlikely.
Nonetheless, as more BRICS nations implement cryptocurrency regulations and develop infrastructure, China might reconsider its position, provided it aligns with the broader objectives of BRICS and its own national interests.
