The Chinese Blockchain Story Explained
Just a couple of weeks ago, Bitcoin exploded with an immense upward trajectory, taking out 40% gains in the process. The soaring move was the third-largest in BTC trading history and the biggest since 2011.
While many found themselves wondering where the move came from, for those who were reading Chinese president Xi Jinping’s statements, the answer was clear. Jinping went on the record just before BTC’s big move to make clear that not only is China bullish on blockchain, but that the country wants to take deploy it across every industry in its economy.
China’s sudden bullishness on blockchain should come as no surprise. For nation-states’ competitive economies, technology is often the main theater of battle. While the United States and Europe continue bickering about whether blockchain is good for the economy or not, China has sensed an immense opportunity. It wants to reshape its economy and take hold of the most revolutionary tech since the dawn of the internet.
China Is Using Blockchain to Make Yuan a Global Currency
The Chinese yuan is primed to become a global currency on the heels of Jinping’s statements about blockchain. As if more weight were needed to make a guarantee of his prognostications, the PBOC, China’s central bank, confirmed that it is making a digital currency out of the yuan.
What this means is that the yuan will be far better suited for gaining international adoption as a currency standard than other forms of money. Until now, the closest kind of money considered global currency is the US dollar. However, its influence has been greatly eroded by the proliferation of medium of exchange currencies and crypto itself.
Facebook’s Libra currency threw the digital yuan project into high gear as Chinese officials scrambled to respond to what they considered a financial threat to national interests. Rather than let a privately held currency like Libra catch on, the PBOC has decided in favor of creating its own answer well ahead of time.
Bullish for Bitcoin?
We know that investors enjoyed Jinping’s initial statements based on the unrivaled surge in BTC values it produced. However, is China’s involvement in blockchain good for bitcoin in the long term?
The answer is a resounding yes. China is the world’s most populous country and it possesses a middle class that is rapidly rising in both wealth and purchasing power. With Chinese leadership taking a strong interest in blockchain, the conversation amongst investors will surely turn toward bitcoin more often than not.
While China still officially bans bitcoin trading, many insiders have speculated that the country will begin reintroducing measures for regulating the industry. That should allow retail investors to get back in the game. Back in 2017, Chinese investment helped propel crypto to mercurial heights.
In 2020, we could be looking at a repeat.
Tokens to Watch
Bitcoin isn’t the only cryptocurrency to respond well to the Chinese government’s about-face on digital currency. NEO, ONT, and QTUM are three blockchain platforms with direct ties to China. If the Chinese maintain the current positive atmosphere surrounding crypto, then expect these projects to lead the way in terms of gains.