2020 has been a year
full of challenges for the world, but for a country like China with such
a large population base and rapid development, it has also been a year
of opportunities.

On Oct. 24, 2019, China officially upgraded its
blockchain technology to be a national strategic priority. One year
later, the development of China’s blockchain industry has been at the
forefront of the world in many ways.

The number of China’s disclosed blockchain projects ranks highest

According to a research report
from Gyro Research, a Chinese blockchain media company, from Oct. 24,
2019 to Sept. 1, 2020, the number of global blockchain projects was on a
downward trend. Approximately 345 new blockchain projects around the
world were disclosed — a decrease of 163 compared with the same period
the previous year. China ranks first with 252 projects, which is about
73% of the world and a 12% increase year-on-year, and its number of use
cases far exceeds the United States, which ranks second with 27.

Meanwhile,
it’s clear that China’s blockchain policy plays a significant role in
this area. The increasing number of projects peaked after the release of
the policy. Among the 252 projects, 56 were added in November 2019
after the policy was released, and 48 were disclosed in December 2019,
after which the number of projects gradually flattened out.

From
the perspective of regional distribution, Beijing, Shanghai, Shenzhen,
Zhejiang and Guangdong are the five major Chinese provinces that
actively promote the implementation of blockchain. According to the
incomplete statistics from Gyro Research, technology projects are mainly
concentrated in the fields of government affairs, public services and
finance.

In addition local governments, some publicly listed
companies — such as Tencent, JD.com, Xiaomi, Huawei, Baidu, etc. — are
also actively promoting the design and adoption of blockchain
technology. Speaking on the status of blockchain adoption this year and
the plan for next year, Claude Jiang, general manager of Xiaomi Digital
Fintech, told Cointelegraph:

“This year, we have already
launched government industry and finance platforms in Tianjin,
Chongqing, Guangzhou, Ningbo, etc., and made a variety of innovative
industry-side financing products based on blockchain technology. Next
year, based on these products, innovative industry support will be
provided to the industrial structure to help the industry make use of
blockchain and other technical capabilities to complete digital and
intelligent upgrades.”

Blockchain-based Service Network promotes blockchain adoption in China

On April 25, the national-level blockchain platform “Blockchain-based Service Network,” or BSN, was put into worldwide commercial use by the State Information Center, a Chinese government institution. 

According
to its official introduction, the BSN is a cross-cloud, cross-portal,
cross-framework global infrastructure network used to deploy and operate
all types of blockchain-based decentralized applications. It is going
to become the only global infrastructure network that is independently innovated and access-controlled by China.

One
of the biggest obstacles to the implementation of blockchain technology
is the cost to build a platform. There are many blockchain platforms,
and in the future, the same data-island problem as is seen with the
traditional internet may also arise. Currently, the BSN ecosystem covers
the underlying architects, developers, cloud service providers, portal
providers, and operation and maintenance parties, and the ultimate goal
of the BSN is to become an internet that unifies the fragmented
blockchain market.

So far, there have been 136 public city nodes
deployed on the BSN. Among them, 98 are already-connected Chinese nodes,
30 are under construction and 8 are overseas. In terms of the network’s
framework, there are four alliance chains, 12 public chains and
two cross-chains. The cloud service providers include China Mobile,
China Telecom, China Unicom, Baidu Cloud and Microsoft Azure. Twelve
well-known public chains have been integrated, including Ethereum,
Tezos, EOS, Solana, Algorand, Polkadot, Nervos, Neo, IRISnet, ShareRing,
Bityuan and Oasis.

When reviewing the achievements made by the
BSN in 2020, Yifan He, CEO of Red Date Technology — the operating entity
of the BSN — told Cointelegraph:

“Next year, China’s
blockchain industry will flourish. However, because blockchain
technology is still in its early stage, in addition to vigorously
promoting the possible applications, we also hope to see more companies
follow and participate in infrastructure and the underlying technology.
Next year will be the first year of the central bank’s digital currency,
which will be one of the main driving forces in promoting the
development of the blockchain industry. I also hope that companies in
the industry will pay more attention and have discussions.”

China’s DCEP: From theory to practice

On
Dec. 12, Suzhou, one of the four pilot cities for China’s Digital
Currency Electronic Payment, or DCEP — otherwise known as the digital
yuan — officially launched the project
by giving away digital yuan “red envelopes.” Four payment scenarios
have been implemented, including dual offline payment, offline payment,
online payment and cash on delivery. 

It was in 2014, when Zhou
Xiaochuan, governor of the People’s Bank of China at the time, proposed
the idea of building a digital currency. The central bank also
established the world’s first official institution engaged in legal
digital currency research and development, the Digital Currency Research
Institute.

After six years of research and repeated practice, on Aug. 14, the Ministry of Commerce announced that the digital yuan would be piloted in 28 provinces and cities.

Because
the vast majority of Chinese residents are already accustomed to
electronic payments through Alipay and WeChat, the large-scale promotion
of the DCEP may be quite easy in the future. However, the introduction
of the DCEP is unlikely to cause any interference in China’s current
electronic payment system; it will simply allow Chinese residents one
more option. The DCEP’s offline payment experience could make Chinese
people and companies pay more attention to blockchain technology,
promote more corporate research and adoption of blockchain, and
accelerate the development of the entire industry.

Regarding the development of China’s DCEP in 2021 and in the future, Huobi University president Jianing Yu said:

“We
can see from the current pilots that the payment function of E-CNY has
been relatively complete. It can support both online and offline payment
scenarios, and even can finish transactions without internet. But the
real meaning of E-CNY is more than that. In the future, the usage of
E-CNY will extend to more retail scenarios, and it can embrace the
challenges from advanced technology. In the 5G era, driverless cars,
Internet of Things equipment, Industrial Internet will be widely used,
and the demand for transactions among things will continue to increase,
but the current currency and financial system cannot meet those future
needs. In this situation, RMB must update to meet those potential
demands for trade and finance."

He also said: "E-CNY is a
kind of currency facing the future. Digital Era is the future, every
asset including personal ID will be digitized. The popularization of
E-CNY will accelerate the process of identity digitization and asset
digitization, which will further expand the field of digital economy.
E-CNY will bring a brand new business opportunity and empower for 'New
Smart Business' transformation in the future."

Strengthened regulation by the Chinese government

On
Oct. 23, the People’s Bank of China publicly solicited opinions on a
revised version of the Law of the People’s Republic of China on the
People’s Bank of China. It is worth noting that in the new “draft for comment,” there are some provisions related to digital currency.

This
may be the first time that China has included relevant provisions
related to digital currency in the scope of the law. On the one hand,
making it appear in the public eye in the form of a draft for comments
affirms the legal status of the DCEP; but on the other hand, it implies
that digital currencies in any other shape or form are not legal in
China.

As the U.S. Department of Justice and the Commodity Futures
Trading Commission intensify regulation of the crypto market, global
regulation is also strengthened, and China is no exception. For some
digital currency exchanges that are registered overseas while having
physical operations in China, relevant regulation has been further
developed.

China is one of the fastest countries when it comes to
adopting new technologies. Chinese consumers are more likely to accept
new technologies, and this willingness may give China an advantage. The
significant population base and “netizens” base, the popularization of
mobile internet and payments, a large number of talented developers, and
government support for technology adoption are all factors that may
contribute to the progress in China’s blockchain industry.

Especially
in 2020 while the pandemic is going on, government demand for
blockchain technology adoption in public services such as medical care,
charity, epidemic prevention and traceability is much more urgent, which
to a certain extent has promoted the development of China’s blockchain
industry.

source link : https://cointelegraph.com/news/china-s-crypto-landscape-how-cbdcs-drove-blockchain-adoption-in-2020