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Last week, Chinese President Xi Jinping made several positive remarks regarding blockchain adoption, which sent the share prices of various blockchain-related firms to higher levels. The comments from the Chinese leader also skyrocketed Bitcoin(BTC)trade, resulting in last week’s rally that the crypto market witnessed.
However, the Chinese state newspaper the People’s Daily released a commentary, explaining that investors shouldn’t refer to this blockchain endorsement as a support for the entire crypto market as a whole.
Xi Jining said that China should boost the development of distributed ledger technology and blockchain, which is the underlying technology of cryptocurrencies such as Bitcoin.
The People’s Daily newspaper, a state-run news outlet, as published on Monday that “Blockchain’s future is here but we must remain rational. The rise of blockchain technology was accompanied by that of cryptocurrencies, but innovation in blockchain technology does not mean we should speculate in virtual currencies.”
Following Xi’s comments, several Chinese brokerage firms also received a notice from Shanghai Stock Exchange on Monday, Chinese traders told Reuters. The notice states tat “for any blockchain-related (topics), we ask listed companies to make statements based on facts and not make any exaggerated claims or create vicious hype.” The Shanghai Stock Exchange denied commenting on the matter further.
Adopting Blockchain, Opposing Cryptocurrency
Chinese officials have consistently been against digital currencies, and consequently attempted to shut down businesses related to crypto. The Chinese government started taking strong action against the country’s crypto industry in 2017, and local regulators started banning crypto trading platforms, claiming that they were involved with illegal fundraising, pyramid schemes, and other illicit activities.
The Chinese government said that the regime has always been supportive of blockchain technology; yet, such explicit encouraging comments about blockchain had never been actually made until recently. Xi’s remarks were the first time that China has publicly announced its support of blockchain development. Beijing is also creating its own central bank-issued digital currency on which it will have full control with regard to aspects such as money circulation, the issuance of funds, and general supply.
Last week, China’s internet regulator, the Cyberspace Administration of China (CAC), approved a list of 309 blockchain-service providers as part of its effort to boost blockchain development; previously, the Chinese agency released a list of 197 blockchain companies. This indicates how serious the Chinese authorities are about developing blockchain-based solutions and creating blockchain-friendly infrastructure.
Traditionally, China has always taken a stand against cryptocurrency but adopted blockchain technology to the extent that several Chinese government departments have utilized blockchain to ease tasks and save time and transaction costs.