Written by: Khairul Haqeem, Journalist, AOPG.
In the bustling heart of Beijing, a new frontier is taking form. A frontier not of land or sea, but of a technology that could possibly restructure the digital landscape in ways we are only beginning to understand. Blockchain.
China has just inaugurated a national blockchain research centre, a bold step that signals the country’s determination to stake a claim in the future of the digital economy. This comes despite Beijing’s firm stance against cryptocurrencies, the most well-known application of blockchain technology.
The new centre, approved by the Ministry of Science and Technology, will partner with universities, research institutes, and corporations. The goal? To train an army of 500,000 blockchain professionals, primed to push the boundaries of this nascent technology. Additionally, the centre is set on establishing a national-level blockchain network, connecting existing blockchains across the country and offering support to other industries.
The irony isn’t lost here. Despite China’s stringent ban on cryptocurrencies, the country’s investment in blockchain reveals an interesting dichotomy: a belief in the transformative power of blockchain, but a rejection of its most popular manifestation — cryptocurrencies.
This isn’t just a token gesture, either. Blockchain development took centre stage after President Xi Jinping endorsed the technology in 2019. The Chinese State Council later identified blockchain as one of seven major areas of development for China’s digital economy in a five-year plan issued in 2021.
However, the narrative changes as we turn our eyes towards Hong Kong. Under the “one country, two systems” arrangement, Hong Kong seems to be dancing to a different tune. The city has been making headway to establish itself as a virtual asset hub, even introducing regulations to make cryptocurrencies a new asset class.
This divergence raises eyebrows and prompts the question: Could Hong Kong become a launching pad for China’s crypto activities? Some may be quick to respond affirmatively. After all, mainland-tied exchanges such as OKX and Huobi have announced plans to get licensed in Hong Kong. Even some Hong Kong branches of mainland banks have started to onboard crypto clients.
But, here’s the catch. Despite these developments, China’s hardline stance on cryptocurrencies remains unaltered. Zhou Chenggang, CEO and founder of CPIC Investment Management Hong Kong, a subsidiary of the government-backed mainland property insurer China Pacific Insurance (CPI), warns against reading too much into Hong Kong’s policy shifts.
China’s pursuit of blockchain, combined with its rejection of cryptocurrencies, hints at a future where Beijing envisions a digital economy built on blockchain — but one that is decoupled from the volatility and regulatory headaches associated with cryptocurrencies.
And there lies the crux of the matter. Beijing seems to be treading a fine line, balancing on the knife edge of innovation and control. It’s a risky game, but one that could redefine the contours of the digital economy if played right.
Only time will tell if this strategy bears fruit. But one thing is certain: China’s journey into the blockchain frontier is a story worth watching. So grab your popcorn, sit back, and let the saga unfold.
