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China’s blockchain experiment across the country, explained

China’s blockchain experiment across the country, explained
A television camera is seen in silhouette standing in front of “Autoglyph #177", a non-fungible token (NFT), and “CryptoPunk #7523", a series of 10,000 unique pixel-art characters made by Larva Labs in 2017, during a media preview for the “Natively Digital: A Curated NFT Sale" auction at Sotheby’s in New York City, U.S., June 4, 2021. REUTERS/Shannon Stapleton

The backstory:

  • Stripping things back a bit because we understand there’s still a bit of confusion about crypto and blockchain, but essentially, a blockchain is just a place to store information securely in a digital format.
  • It’s mostly known for being the underlying technology in cryptocurrencies like Bitcoin, for maintaining a secure and decentralized record of transactions without the need for a third party, such as a bank.
  • China imposed an all-out ban on crypto last year, which led to many crypto companies leaving the country. But the government isn’t against the technology itself; it just wants it to be centralized.
  • But what a crypto expert who asked to remain anonymous explained to us is that “I think [the Chinese government] are exploring a lot in terms of the blockchain technology, rather than the decentralized finance type of projects.”
  • The source pointed to how McDonald’s China gave away non-fungible tokens (NFTs) on its anniversary, with no apparent pushback from the Chinese government. The source also pointed to how China’s digital yuan is a crypto-like currency without the decentralized aspect.
  • This comes during a time when many are also wondering how the second-largest economy will maintain a balance between government intervention and control and entrepreneurship.

The development:

  • China has chosen 15 city governments and over 160 groups, including companies, universities, hospitals and more, to carry out a blockchain technology trial.
  • According to the Cyberspace Administration in a statement on Sunday, the aim is “sufficiently letting the blockchain technology play its role in facilitating data sharing, optimizing business procedures, lowering costs, improving synergy and building reliable systems.”
  • The statement added that these trials would span several industries, like manufacturing, copyright, finance, healthcare and education. The entities involved will be encouraged to use blockchain hardware and software during the trial in a “comprehensive” and “sustainable” way.

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