Last week, while speaking at the Politburo Committee session, Chinese President Xi Jinping asked the country to double-down its efforts in the blockchain space. Xi said that having a strong foundation in blockchain technology, China should accelerate its blockchain development across multiple sectors like poverty alleviation, public services, healthcare, and others.
Xi’s statements have caused a stir in the overall cryptocurrency with Chinese projects seeing a massive surge on Sunday, October 27. Chinese crypto projects saw a massive surge by a whopping 40-90% on Sunday as the crypto community was quick to react on Xi positive statements.
Projects like Nebulas, Ontology, GX Chain, Qtum saw the maximum rise while Bytom stole the show gaining over 100% gains. We already know that China has introduced a complete ban on public cryptocurrencies in 2017. Hence it is difficult to comprehend that Xi’s statements had any actual impact on the crypto market.
Besides the Chinese crypto projects making major surge, China’s multi-purpose app WeChat showed a 1200% rise for blockchain-related services the next day on Friday, October 25.
China Tweaking Cryptocurrency Law
Although China has banned digital currencies within its boundaries, its central bank PBoC is aggressively working on a central bank digital currency (CBDC) plan. China’s CBDC ambitions grew after Facebook announced its Libra cryptocurrency earlier this year in June 2019. Chinese government officials say that its CBDC move is to counter any external threat to its financial stability.
To accommodate its CBDC, the Chinese government has passed a new cryptography law that will come into effect since January 2020. The agreement to pass this law came just within 24-hours after President Jinping spoke about blockchain adoption last week.
The law aims to regulate the cryptocurrency market in China while still keeping absolute control in the hands of the Chinese state.
“The State encourages and supports the research and exchange of cryptographic science and technology, protects cryptographic intellectual property rights according to law, and promotes the advancement and innovation of cryptographic science and technology. Organizations and individuals who have made outstanding contributions to the work of cryptography shall be commended and rewarded in accordance with relevant state regulations”, the draft proposal for the cryptography law reads.