Chinese President Xi Jinping’s speech last week lauding the powers of blockchain technology as revolutionary has sparked a flurry of bullish speculation that the country is about to ease its ban on cryptocurrency, but crypto bugs might be getting ahead of themselves.
Speaking to the Chinese Academy of Sciences’ annual conference in Beijing on May 28, Xi called blockchain a key technological “breakthrough” of revolutionary proportions, along with artificial intelligence and other recent advancements.
The speech, while benign by all measures, has prompted media speculation of a highly anticipatory nature, with China’s Global Times opining that regulators in Beijing may be ready to reconsider their ban on cryptocurrencies.
“[…] Fencing off bitcoin exchanges can’t effectively end bitcoin trade, and fears of a bitcoin bubble could leave China behind in the digital currency revolution,” notes an opinion piece in Global Times.
But bitcoin doesn’t seem to be feeling the Chinese love.
Recently, bitcoin started to rally back up from $7,040 to $7,700, but the rally was short-lived and its descent back down has some predicting it could work its way back to $6,000, though short-term bulls thought $10,000 was feasible in June once it broke $7,700. Low trading volumes have kept it at bay and the bulls have been fenced in.
Now bulls are optimistic that China will backtrack on its ban, all because President Xi is keen on blockchain. Related: Trade War Rattles Markets
Here’s where that argument falls apart, though: Blockchain is not cryptocurrency, even if it is the technology that underpins digital tokens. Blockchain is much easier for governments, corporations and even Wall Street to embrace because it’s a revolutionary technology that promises to disrupt nearly every industry on the planet. Cryptocurrency is a speculative bubble-maker.
Embracing blockchain does not signal embracing cryptocurrency, but bulls will be bulls.
And that China recognizes the gift of blockchain is nothing new, either. It’s already old news that Beijing is developing national blockchain standards, which is plans to unveil by the end of next year.
Rumors that China is preparing to revive crypto trading have been circulating since January, but always denied by officialdom.
For blockchain, though, China isn’t only willing to acknowledge it’s potential, but it’s clearly hoping this will be yet another technological weapon in its global economic dominance arsenal. And that means educating the people.
China’s main state-run broadcaster, CCTV, this weekend aired an hour-long discussion about blockchain, saying the technology’s economic value is “10 times more than that of the internet”.
Among an impressive line-up of blockchain experts, Stanford University professor Zhang Shoucheng told CCTV that “while the real value of the internet is aggregating individual pieces of information into one place, which is exactly what Google and Facebook does, we are now entering an era where information is being decentralized so that individuals can own their individual data. And that’s the real value of blockchain that makes it exciting.”
Beijing is keen to promote lasting blockchain projects, and says that some 200 Chinese enterprises have already expressed interest in jumping on this bandwagon. So far, it’s been “hit and miss”, according to official Chinese data, which shows that the average life span of a new blockchain project is just a little over one year, then they die off.
The last time crypto bulls thought something positive for bitcoin was brewing in Beijing was earlier this month when China came out with its first official ratings for 26 crypto assets, according to Cointelegraph.
By Michael Kern for Safehaven.com
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