China’s Push into Blockchain Technology
China seems to be leaning into blockchain adoption following its ban on cryptocurrency transactions in 2021.
The country is set to launch a National Blockchain Innovation Center in Beijing that will work with universities, blockchain experts, and companies to research and explore the core technology.
The focus of the research
The National Blockchain Innovation Center will focus on the fundamental theories of the concept, key technologies such as software and hardware, and primary platforms and verification networks.
The Beijing Academy of Blockchain and Edge Computing (BABEC) will be in charge of the center, known for its ChainMaker blockchain, which has the backing of 50 corporations, including the state-owned China Construction Bank.
BABEC’s contribution to blockchain technology
BABEC is a leader in the field, executing 240 million transactions per second (TPS), compared to 100,000 TPS in 2021. The state’s decision to place BABEC in charge of the new research institution is a testament to its expertise in the field.
China’s relationship with blockchain
Despite China’s strict stance against cryptocurrency trading, it has been a significant player in blockchain innovation. The country considers itself a “blockchain nation.”
In September 2022, the Chinese government claimed that the country accounted for 84% of all blockchain applications filed globally. However, the approval rate of these applications could be higher, with only 19% receiving approval.
Blockchain and CBDC
Blockchain technology and the Central Bank Digital Currency (CBDC) project have become the government’s trademarks. The central bank has already launched the e-yuan (e-CNY), worth millions of dollars, across the country to promote the adoption of CBDC. During the holiday period, the central bank launched about 200 activities for e-CNY to encourage consumption. Cities like Shenzhen even gave out subsidies and consumption coupons worth millions of e-CNY to support the catering industry.
China’s goals for CBDC Adoption
China has set targets for different cities to boost CBDC usage, with Hangzhou city issuing 80 yuan worth of e-CNY vouchers to each resident on January 16, giving away a total of 4 million yuan ($590,000) worth of e-CNY. These efforts clearly indicate China’s commitment to promoting the use of CBDC in the country.