Key Takeaways
- The Chinese government is setting up the National Blockchain Technology Innovation Center in Beijing to focus on the development and application of blockchain technology.
- Despite China’s anti-crypto stance, the country has been supportive of the development of blockchain technology and has high hopes for permissioned blockchains.
- China has a large number of blockchain patent applications and is considered a leader in the technology despite restrictions on cryptocurrencies.
- The National Blockchain Technology Innovation Center will explore major use cases related to the Chinese economy and personal livelihoods, further demonstrating the country’s commitment to blockchain technology.
Blockchain technology has been making waves in the technological world, with its potential to revolutionize various industries. China, being one of the leading economies of the world, is not far behind in embracing the potential of this decentralized ledger technology. In a recent development, the Chinese government has approved the establishment of a national blockchain innovation center, aimed at exploring the industrial applications and major use cases of blockchain, particularly those related to the Chinese economy. This move is a testament to China’s commitment towards harnessing the full potential of blockchain technology.
National Blockchain Innovation Center
The Chinese Ministry of Science and Technology has officially approved the establishment of the National Blockchain Technology Innovation Centre, a blockchain research center in Beijing, the government-run newspaper Beijing Daily reported Wednesday.
It will be led by the Beijing Academy of Blockchain and Edge Computing (BABEC) and will focus on developing blockchain-related technologies and their industrial applications. The center will also explore major use cases related to the Chinese economy and personal livelihoods.
Focus on Permissioned Blockchains
China is supportive of blockchain technology but has an anti-crypto stance and an ongoing crackdown on crypto-related activities. China instead has high hopes for permissioned blockchains, which limit who can alter the ledger. In 2019, President Xi Jinping said blockchain would play an important role in the next round of technological innovation and industrial transformation.
Growth of Blockchain Companies In China
Following Xi’s endorsement, many tech firms, startups, and investors have entered the blockchain space. The number of registered blockchain companies in China has risen to 1,821 as of July 2022.
Blockchain-based Service Network (BSN)
Another important development in China’s blockchain technology is the creation of the Blockchain-based Service Network (BSN). The BSN is a public infrastructure network that provides a platform for businesses and organizations to build and run blockchain applications.
It aims to create a standardized and interoperable network that will make it easier and cheaper for businesses to develop and deploy blockchain-based solutions. The BSN is backed by entities linked to the Chinese government and it has received significant investment from the Chinese government, and its development is seen as a major step towards the widespread adoption of blockchain technology in China.
Cross-border Payments
Last month, Hong Kong-based Red Date Technology, a founding member of China’s Blockchain-based Service Network (BSN), launched a project called the Universal Digital Payments Network (UDPN) to implement stablecoins and central bank digital currencies (CBDCs) in cross-border payments.
Red Date Technology, along with IT solutions provider GFT, and digital asset platform TOKO, created the Universal Digital Payments Network (UDPN) as a collaborative effort.
The goal of the network is to provide a platform for enterprises from different countries to conduct transactions and settlements using regulated digital currencies. The UDPN aims to serve as a standard messaging system for CBDCs and stablecoins, just as the Swift network did for traditional financial institutions. The companies described the UDPN as a solution for the next generation of digital currencies.
China’s Anti-Crypto Stance
Cryptocurrencies are banned in China, and the state-backed Blockchain Service Network (BSN) has been working to sever cryptocurrencies from its network. The BSN launched the Spartan Network last year, which forks popular blockchains and prohibits fungible tokens used for cryptocurrencies.
China Has The Most Blockchain Patents
China has the most blockchain patent applications of any country, accounting for 84% of the world’s total. From 2015 to June 2021, blockchain patent applications from China accounted for nearly 60% of the global total. Despite the high number of applications, only 19% of them were approved, which is lower compared to the US and South Korea. A government official stated that blockchain accelerates integration with the economy and services for people’s livelihoods.
Overall, the establishment of the National Blockchain Technology Innovation Centre in China is a significant development that highlights the country’s efforts to lead the way in the adoption and development of blockchain technology. Despite a ban on cryptocurrencies, China’s support for the development of permissioned blockchains and its large number of blockchain patent applications show a clear intention to be at the forefront of the blockchain revolution. As the world continues to evolve and new technologies emerge, it will be interesting to see how China leverages blockchain to drive innovation and growth in the years to come.