5 years ago

Blockchain is regarded as a “core technology breakthrough” by Xi Jinping. China and the United States have different attitudes toward this technology.

5 mins read
blockchain china

Chinese President Xi Jinping recently stated that the integration and application of blockchain technology plays an important role in new technological innovation and industrial transformation. It is necessary to use blockchain as an important breakthrough for independent innovation of core technologies and accelerate the promotion of blockchain technology and industry. Innovation and development.

After the announcement, Bitcoin once hit $11,000, achieving Bitcoin’s biggest single-day gain in eight years.

At the same time, Mark Zuckerberg, the founder of US Internet giant Facebook, felt a crisis for his digital currency Libra project. Recently, Zuckerberg attended the US Congress hearing for the digital currency Libra project and was once again accused by the two parties in the United States.

At the hearing on October 23, Zuckerberg repeatedly mentioned China’s “threat” in this field. He said, “China is taking swift action to prepare similar products in the coming months. We can’t wait and see that as long as the United States is now a global leader, we will always remain a leader even if we don’t innovate.”

The scientific and technological war between China and the United States is kicking off, and the blockchain, as an important area of ​​technological innovation in recent years, has always been regarded as one of the platforms for Sino-US competition. From Zhu Kebei’s speech by the Congress to Xi Jinping, who will seize the opportunity of the blockchain and become a topic.

Sino-US blockchain policy is very different

It must be admitted that simply comparing Xi Jinping’s speech with Zuckerberg’s hearing can not explain the problem. After all, blockchain technology cannot be equated with digital currency and payment system products, and China attaches great importance to the development of blockchain technology and the US government’s wariness against digital currencies.

However, this still reflects the very different mentality of the Chinese and American governments in dealing with emerging technologies and industries. According to the data of 2018, the number of blockchain startups in the United States still ranks first in the world, leading the technology ecology, and the core competitiveness of talent supply and R&D capabilities is still leading. However, the two governments have formed completely different paths in the process of recognizing, supervising and guiding blockchain technology.

First, Chinese officials are quicker to accept blockchain technology.

In his speech, Xi Jinping mentioned that blockchain technology is China’s “core technology independent innovation breakthrough”, indicating that the CCP has raised blockchain technology to a very important position in the development of national science and technology. Although American companies have advantages in technology ecology, the role of the government and the positioning of the technology are still vague, and there is no systematic support policy.

In September last year, the US Congress established a blockchain core group, which believes that blockchain technology should adopt a “non-interference” approach to regulation, allowing it to evolve in the same, autonomous way of the Internet. In addition to the introduction of the Initiative Act to protect start-ups, the blockchain sector remains dominated by regulatory roles.

However, in the “13th Five-Year Plan” national informationization plan released by the State Council of China in 2016, the blockchain has been classified as “strategic frontier technology”. Since then, China has introduced a number of blockchain support policies from the central to the local. According to incomplete statistics, in the first half of 2019, at least 23 provincial-level administrative regions in China issued 106 policy information related to blockchain support, and 35 policy information related to blockchain regulation.

In terms of cryptocurrency, the Chinese central bank plans to develop its own digital currency in 2014 and has more than 40 patents related to digital currency. The Fed still has different attitudes toward the issue of digital currency, and there is no plan to develop digital currency, and Libra is worried about the status of the dollar.

Second, the Chinese government has different regulatory mechanisms and methods for blockchain technology.

Due to Bitcoin’s decentralized features, it aims to eliminate information asymmetry and increase transparency, which makes cryptocurrency always the opposite of government currency. Both China and the United States have cracked down on cryptocurrencies. For example, the United States banned the then-Silk Road website in 2013 to combat the illegal trade of Bitcoin. Chinese regulators have repeatedly suppressed and restricted Bitcoin mining.

However, China’s view blockchain is an information service technology. The main body of supervision is the Network Security and Informatization Committee. The financial risks that the blockchain may bring are regulated by the People’s Bank of China. In the United States, the blockchain is mainly regarded as financial technology, mainly by the Securities and Exchange Commission (SEC) and the CFTC (Commodity Futures Trading Commission).

China’s regulatory core is information services, the United States is regulating financing and trading behavior; China is regulating the blockchain technology using the filing system, while the United States follows the registration system for securities issuance.

Third, the development direction of the two countries in the blockchain is different.

Due to different regulations, China’s blockchain tends to develop the so-called “no-coin blockchain”. From the underlying technology to the application of the US blockchain, most projects will be accompanied by the generation of cryptocurrency and financing for sale.

The cryptocurrency is not allowed to be financed in China, so the blockchain industry in the two regions has a completely different development path. The core of China’s blockchain technology is to serve the physical application and explore in the fields of medical, judicial, industrial and media. In the United States, technology is used in games, gambling, exchanges, etc., focusing on the circulation of digital assets and digital currency.

Although the concept of the blockchain has been proposed for 28 years, the application history started by Bitcoin is only 10 years, and the road between China and the United States seems to have been forked.

Differences in thinking about emerging things

For the global governors, the blockchain is still a new thing, and new things mean opportunities also mean risks. China and the United States are now different in the development of blockchain technology. On one level, they reflect the different ways in which the government responds to new things.

The United States is clearly the first to consider the risk of blockchain, its impact on the dollar, the US government’s information regulation, and the US’s global dominance. Even US President Donald Trump has previously said that the digital currency is “air currency”, which shows that the federal government’s attitude toward this is generally resisted. However, under the American liberal market concept, the blockchain naturally took root and exceeded the government’s regulatory capacity, which made the government feel nervous.

Through Zhukberg’s three-time hearings in Congress, he also saw that members of the House of Representatives took the issue of blockchain as a political issue. In fact, behind this severe torture is not only the consideration of public information security, but also the maintenance of government authority.

The Chinese government’s attitude is to learn, analyze, and then study how to use new things for themselves. In fact, the blockchain has played a positive role in the infrastructure construction of the “Belt and Road” and the “CEIBS”, and the R&D of the Chinese central bank on digital currency may also become part of the RMB internationalization strategy. At the same time, the blockchain is not allowed to be used for financing, and it is also in line with China’s economic policy of deleveraging.

Perhaps behind the two roads between China and the United States, it is also a difference between a superpower with global power and emerging market countries. The blockchain industry is still immature, and it is difficult to talk about how the competition will develop, but the different roles of the Chinese and American officials in the industry will eventually emerge.

Don't Miss