The People’s Bank of China (PBOC) and the Shanghai commerce commission have issued a joint statement signaling their support for blockchain use in commerce.
China Goes All-In on Blockchain
According to the agencies, decentralized technology can be used in trade finance to resolve asymmetries and validate transactions.
In the published document, the two government institutions underscore the cost-effectiveness of blockchain systems, while affirming their appropriateness in international trade.
Just two weeks ago, Chinese President Xi Jinping proclaimed the need to develop blockchain technology. Speaking at a gathering of the Political Bureau of the Central Committee officials, Xi said that blockchain applications could be used in a myriad of sectors. He listed digital finance, intelligent manufacturing, supply chain management and digital asset trading, among them.
The president additionally urged researchers to take a top-down approach in development. His pro-blockchain and crypto sentiments sparked a 20% bitcoin price rally within 48 hours.
Xi’s remarks are believed to have marked a U-turn in policy towards cryptocurrencies. The Chinese government has, in the past, threatened to outlaw some crypto-affiliated activities such as cryptocurrency mining, but authorities have now confirmed that there will be no such crackdown. This is according to the latest communique released by the National Development and Reform Commission (NDRC).
The Central Bank is Working on Own Cryptocurrency
The Central Bank of China is reportedly on the verge of launching its own cryptocurrency. The Bank of China and the Agricultural Bank of China will be among the first institutions to receive the digital tokens. Alibaba, Tencent and Union Pay are also alleged to be in this premier group.
The project concept rivals that of the estranged Facebook Libra network,