Applications and Use Cases

China Trialing Blockchain Apps in Major Cities and Entities

February 01, 2022

China has officially begun trialing blockchain applications and has designated several cities and entities as part of the trial projects. Beijing, Shanghai and Guangzhou are all participating in the blockchain pilot.

The Chinese government also announced that it has chosen 164 additional entities to carry out trial blockchain applications. These include local government departments, banks, universities, car companies, hospitals and power firms.

The move comes after China's cyberspace regulator, in tandem with other governmental regulators, issued a notice calling on provincial-level regulators to "give full play to the role of blockchain" for data sharing, reducing operating costs and optimizing business processes. The notice also stated that all the pilot participants should "give priority to adopting blockchain software and hardware technologies."

In June, China announced it would roll out a national blockchain standard in 2022. The China Electronics Standardization Institute has already drafted the standard and is waiting on approval. The country also released its Five-Year Plan, outlining development goals and elevating blockchain to the same level of importance as AI, big data and cloud computing.

The blockchain push came on the heels of a massive crackdown on cryptocurrency trading and mining, with China viewing digital coins as a threat to the country's financial stability. At the same time, the People's Bank of China is moving ahead with a digital version of the yuan currency. The new cryptocurrency will not be decentralized, however, and will be controlled and issued by the Chinese central bank.

According to the founder of a leading cryptocurrency investment firm, China is dominating the blockchain market and is years ahead of the U.S. in terms of development initiatives. Dan Morehead, CEO of Pantera Capital, believes China is six years ahead of the U.S. in building a blockchain payment system. He thinks the advantage may push U.S. companies to step up their blockchain development efforts.

“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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