US media: China's blockchain will become a technology leader

Original title: "US media calls for attention to China's blockchain ambitions: they will become technology leaders"
Original source: Cankaoxiaoxi.com

Last month, Chinese leaders encouraged companies to seize the opportunity to use and accelerate the development of blockchain technology. This is a major event from the perspective of China's approach to the technology. The stock prices of several Chinese technology companies have risen, and the number of searches for the word "blockchain" on WeChat has increased significantly, which has surprised the market. This opportunity has given the green light to large local companies such as social media giant WeChat and payment platform Alipay to innovate freely and given them enormous power.

According to a report on the U.S. Forbes biweekly website on November 25, China’s recently announced blockchain policy is significant for four main reasons.

Reason 1: Establishing blockchain standards

The report said that China is strong in technological innovation and has been working hard to become a leader. This promotion of blockchain is the third time the government has promoted a specific technology. Previously, it promoted 5G and artificial intelligence (AI), and it worked; we have seen these technologies promoted globally. Now, China has taken the same approach to blockchain, declaring blockchain technology a national development priority, allowing local governments to implement their own blockchain policies, and enforcing blockchain standards.

Reason 2: Get huge trade opportunities

China is looking for new export locations in Europe, the Middle East and Africa, mainly around the "Silk Road Economic Belt". Having advanced blockchain technology will give China huge trade opportunities when dealing with emerging technology markets.

Reason 3: Digital RMB can become a global currency

China is reportedly going all-in on the digital asset space. As part of this, they are developing a digital currency electronic payment platform.

This is a plan to promote the central bank digital currency that the People's Bank of China may issue, which has a certain degree of anonymity in transactions and a wide range of encryption services. The goal of the plan is to promote this new digital yuan as a global currency. The reality now is that in its current form, the yuan lacks openness and liquidity in the international foreign exchange market, so there is definitely room for growth here.

The report believes that with this new digital RMB, China will be able to achieve cross-border payments at a lower cost and faster speed. In addition, the automation function using smart contracts will provide more convenient liquidity management and transaction efficiency, and ultimately make the digital RMB an upgraded version of the current M0 (cash in circulation).

Reason 4: Reports speculate that rivals to Libra could be created

The Libra Association was founded in Switzerland and needs to meet the requirements of regulators in all countries involved, which could pose a threat to its existence. In contrast, the digital RMB plan has a clear direction, which is to be implemented as a top-down approved policy. Everything that Libra is trying to achieve seems much easier for China, which already has payment platforms such as UnionPay and Alipay, as well as the super application WeChat, which has 1 billion monthly active users and is already operating as a digital bank.