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Blockchain Research Institute Chairman Says Chinese Renminbi Will Become Crypto in 20 Years

Chinese Renminbe RNB Cryptocurrency

China has been notoriously harsh on the development of cryptocurrency, imposing a ban on investing and trading into digital assets, including Bitcoin. However, the executive chairman for the Blockchain Research Institute believes that in 20 years, Chinese national fait currency will be replaced by a cryptocurrency version.

Donald Tapscott, speaking in an interview with Bloomberg on April 17, said that the Chinese renminbi (RMB), will likely undergo a transformation into cryptocurrency format, despite the country’s current stance against the industry. Tapscott told Bloomberg of a meeting he had with a vice-chairman in the Communist Party of China, who revealed that President Xi Jinping is bullish on the outlook of blockchain and views it as one of the most important technologies for his country’s development.

China, which has caused a recent stir with rumors that the country will crackdown on cryptocurrency mining–in addition to its current stance towards trading and investing–state that the ban was likely short-lived,

“It’s not really necessary to do that [to ban exchanges and mining] because in 20 years we are not going to be using bitcoin in China. Chinese people will use the RMB, only the RMB will become a cryptocurrency. The central bank of China will turn it into a digital currency.”

Industry analysts have pointed to the development of decentralized exchanges (DEXs) as a way to circumnavigate political influence on cryptocurrency marketplaces. While Tappscott contends that DEXs are one way to operate in China, he reports that the country is adamant on clamping down on all forms of crypto-based investment.

Instead, Tappscott believes that the future of decentralized exchanges is to supersede existing centralized platforms, thanks to what he calls their transparent framework and ability to identify manipulation. Tappscott could see a broader market migration to DEXs, including securities.

Despite having the majority of the world’s largest mining pools based in China, the country is giving indications of a looming crackdown on cryptocurrency mining. Chinese authorities have been discussing the issue, with the National Development and Reform Comission (NDRC) reportedly including mining in a revised list of activities to be shut down. Among a number of issues, the agency finds that cryptocurrency mining wastes resources and pollutes the environment, harping on the point that Bitcoin is not energy efficient.

However, China is also leading the world in the number of blockchain projects under development, despite the government’s stance towards investing in cryptocurrency. Even if digital assets continue to be a point of contention for politicians, the technology of blockchain has garnered serious interest, with 263 blockchain-related projects underway–a full quarter of the global total.

Tappscott’s comments reflect a growing belief that tokenized currencies, supported by blockchain, will be the future for fiat as money turns digital. The renminbi, propelled by China’s massive boost in blockchain development, could make the transition to cryptocurrency even if the government ban continues. Compared to other countries, the Communist Party of China seems primarily concerned with staying ahead of regulatory control over crypto, even if they recognize the value of the underlying technology.

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Blockchain Evidence is Legally Binding, says China’s Supreme Court

The Supreme People’s Court of China has issued a set of new rules on the trial of internet court cases, part of which is that blockchain can authenticate electronic data entered in as evidence.

Blockchain Authentication

The court’s ruling issued on Friday sets out new rules to guide the activities of internet courts, and protect the legal rights of disputing parties. A portion of the new regulations relates to the authentication of electronic data presented as evidence:

The electronic data submitted by the parties can prove their authenticity through electronic signature, trusted time stamp, hash value check, blockchain, and other evidence collection, fixed and tamper-proof technical means or through electronic forensic evidence platform certification. [a rough translation]

Data stored or retrieved with distributed technology are now admissible in Court. Also, in instances where electronic data entered in as evidence in a case is questioned by any of the parties involved, the data can be authenticated using blockchain technology.

This new ruling by the Supreme Court agrees with the precedence set by Hangzhou Internet Court earlier in the year.

In a case between a media company and a technology company, Hangzhou Internet Court ruled that decentralized technology can be used as a method to determine the authenticity of the digital information presented as evidence.

Internet Court was instituted due to the rising numbers of online trade disputes and copyright infringements in the country. The Hangzhou Internet Court is the first, and it was instituted in August 2017. The government plans to launch internet courts in two other cities – Beijing and Guangzhou.

China Picks Blockchain Over Cryptocurrencies

Despite the relentless crackdown on cryptocurrencies in the country, the Chinese Government is eagerly embracing blockchain technology.  On the one hand, the government banned ICOs and domestic cryptocurrency trading and exchanges and restricted crypto-related online content. On the other hand, it is also adopting distributed ledger technology in trade and other sectors.

In April, EWN reported that state-owned Sinochem Energy Technology Co Limited completed a shipment of gasoline to Singapore using blockchain technology.

Private Corporations in the country are also adopting the blockchain technology and driving decentralized technology-related innovation globally. Chinese company’s like Tencent and Alibaba are leading the global blockchain patent race.  56% percent of all issued distributed technology-related patents in the world belong to Chinese companies.  Even the country’s Central Bank is also not left out, issuing 68 filings for DLT (Decentralized Ledger Technology) patents.

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China Goes All Out On Blockchain Patents Amid Crypto Ban

China Greets Blockchain With A Smile

Since Bitcoin’s inception, the terms “blockchain” and “cryptocurrency” have gone hand-in-hand, with many using the two words to complement each other in a similar context. Although it is widely understood that the acceptance of blockchain directly implies the acceptance of cryptocurrencies, China has taken a different approach, with innovators within the country seeking to propel the development of blockchain technologies, while hampering the adoption of cryptocurrencies at the same time.

As per a report from the Asia Nikkei Review, an Asia-based news outlet, Chinese firms have clearly led the blockchain-related patent race, with Alibaba alone accounting for more than 10% of the world’s blockchain patent applications. China’s infatuation towards blockchain innovation has reportedly taken the entire country by storm, with internet giants such as Tencent and Baidu issuing a staggering 56% of 406 worldwide patents.

To put this 56% statistic into perspective, the U.S., which is unarguably the world’s foremost technological superpower, is only responsible for 22% of blockchain-centric patent filings.

As per a chart from the report (seen right), the People’s Bank of China takes the cake when it comes to the most decentralized ledger technology (DLT) patents

chinaImage Courtesy of The Nikkei Asian Review

filed by an individual entity, with China’s central bank issuing 68 filings in recent years. Following the PBOC’s 68 patents is Alibaba, Bank of America, nChain Holdings, Beijing Rui Josie Technology Development, Mastercard, Jiangsu Tongfudun Information Technology, Cloud Minds (Shenzhen) Technologies, China United Network Communications and Hangzhou Qulian Technology.

John Eastwood, a Taiwan-based partner at Eiger Law, commented on China’s unrelenting drive for blockchain adoption and development, stating:

Blockchain is a new technological landscape where it could be very profitable for Chinese companies to grab significant territory in their patent claim language. Holding several patents helps to give an aura of legitimacy that helps many companies in the blockchain field to attract investors or acquirers.

Chinese blockchain trailblazers have found a good variety of industries to apply DLT to, including supply chain management, global financial transactions (remittance), postal services, healthcare, and more.

Alibaba’s Blockchain Drive

Alibaba, China’s 2nd most valuable company, has taken a rather open-minded approach when it comes to blockchain. Jack Ma, Alibaba’s founder and one of the most well-known entrepreneurs in the world, has openly endorsed DLT. Speaking at the launch of his firm’s blockchain-centric remittance service in Hong Kong, Ma stated:

Blockchain technology can help overcome the challenges of security, sustainability and inclusion. It could change our world more than people can imagine.

And it seems that the firm hasn’t taken an ‘all talk, no action’ approach,  with the $450 billion giant making a series of moves to accommodate blockchain technologies in recent months. Most recently, Alibaba has begun exploring the use of blockchain in healthcare, partnering with the city of Changzhou to verify and “secure” a patient’s medical data on a blockchain.

While China has undoubtedly taken a leading role in the so-called ‘blockchain revolution’, the heavy-handed government seems to be hesitant to say yes to cryptocurrencies, or at least for now.

Photo by Theodor Lundqvist on Unsplash
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