Applications and Use Cases

China May Be Six Years Ahead of U.S. in Blockchain Development

August 05, 2021

China is dominating the blockchain market and is years ahead of the U.S. in development initiatives, according to the founder of one of the leading cryptocurrency investment firms.

Dan Morehead, who is also the CEO of Pantera Capital, a hedge fund specializing in cryptocurrencies, speculates China is six years ahead of the U.S. in building a blockchain payment system. Morehead believes the disparity may push the U.S. to step up its blockchain game as well as spike competition among other nations in developing blockchain-based payment solutions.

Before cracking down on blockchain last month, China made up 46 percent of total global bitcoin mining power. The country has been focused on developing its own cryptocurrency, the digital yuan, since 2014. Last month China piloted a program in which the government handed out $6.2 million worth of the cryptocurrency to residents through a lottery program. The digital yuan is currently used in tandem with physical bills and coins, but it is unclear if the country plans to completely replace physical currency.

Last year, China announced its Blockchain-based Service Network (BSN), the first blockchain network to be built and maintained by a central government. The network is supported by public and private enterprises and runs through 100 cities.

Red Date Technology, which founded the network along with Chinese state-owned China Mobile and UnionPay, received $30 million in June in a Series A funding round. The money will be used to bolster the BSN team and expand the global market for its blockchain platform.

“There is a rebalancing of global technology infrastructure happening that gives greater access to underdeveloped and underrepresented countries,” Jehan Chu, managing partner at Kenetic, which led the funding round, told CoinDesk. “BSN International, supported by Saudi Aramco and Red Date will use blockchain to help drive financial and technology inclusion for the next 50 years.”

Pantera's Morehead believes that China's activity will spur blockchain development in the U.S. and other countries throughout the globe.

“I think two or three years from now, everyone will realize that blockchain is an asset class by itself and they’ll have a blockchain team and a blockchain allocation,” said Morehead.

Edited by Luke Bellos

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