The cryptocurrency club is becoming exclusive, with countries around the world in a race to put forward their version of a central bank digital currency [CBDC]. China is the only country that has announced the launch of its Digital Currency Electronic Payment [DCEP] this year, with the same already in its testing phase. While the country is making strides with respect to cryptocurrencies, it is merely an extension of Chinese citizens’ longstanding interest in crypto.
According to a recent report by LongHash, it has long been misconstrued that cryptos are banned in China. In 2017, the government had banned initial coin offerings [ICOs]. Following the ban, many mainland-based exchanges were also shut down. However, in fact, over the years China’s government has presented itself as one that supports blockchain technology, but is wary about trading activity.
The country still has active over-the-counter [OTC] trading, and many people in the country follow crypto with great interest. Their interest is mainly focused on Bitcoin and Ethereum, like users in most countries.
However, unlike these other countries, Bitcoin and Ethereum have had a deep-rooted history with China.
The world’s largest cryptocurrency in the industry in terms of its market capitalization, Bitcoin, has been prominent in China since 2016. In 2016, most Bitcoin trades were registered in Chinese currency, but with the ban of ICOs in 2017, the price briefly dropped. As the coin entered the bull run in late 2017-2018, investors in China turned to OTC trading. Despite the fear related to cryptos in the country, China has not banned Bitcoin, rather the central bank even published an infographic to raise awareness about the digital asset.
China is still a big player when it comes to Bitcoin mining as 65% of the global Bitcoin hashrate remains concentrated in the country.
On the opposite end of the spectrum, the focal point of Ethereum in China was the involvement of its co-founder Vitalik Buterin with Wanxiang Blockchain Lab’s Feng Xiao and Fenbushi Capital’s Bo Shen. The three co-founded two businesses in October 2015; one was an investment firm for blockchain startups called Fenbushi Capital, and the other was a non-profit organization to support non-commercial projects called Wanxiang Blockchain Lab. Both these businesses are based in Shanghai.
Buterin, who traveled extensively around China and other parts of Asia from 2014 to 2017, was able to garner a lot of attention for Ethereum. The country has also been an important entity in Ethereum mining recently. The interest is visible from the country’s national blockchain platform service, the Blockchain Service Network’s [BSN] upcoming incorporation of both Ethereum [ETH] and EOS.
China and its people’s interest in the world of crypto goes a long way back and it continues to have a major role to play for both Bitcoin and Ethereum.