China’s top telecommunications and Internet regulators on Monday unveiled new guidelines aimed at transforming the country into a global leader in blockchain technology by 2025, as authorities continue to impose curbs on domestic cryptocurrency production.
The statement, jointly released by the Ministry of Industry and Information Technology (MIIT) and the Cyberspace Administration of China (CAC), also expressed that by 2030 blockchain will provide significant support in “building a manufacturing and network power, developing the digital economy, and bringing about the modernization of governance systems and capabilities.”
As part of the initiative, authorities will seek to enhance both the regulation and further development of blockchain technologies, including by playing an active role in international standards setting forums, establishing clear taxation policies, protecting intellectual property and improving security. Moreover, the statement called for the cultivation of three to five domestic enterprises capable of competing globally in blockchain technology, as well as three to five industrial research and development hubs.
The statement aligns closely with various decisions and comments made by high-ranking officials in Beijing in past years. In October 2019, Chinese President Xi Jinping formally declared blockchain a core technology for the country’s innovation and urged efforts to accelerate its adoption across the country.
During the time period outlined by the statement, the global blockchain industry is expected to expand drastically, from $3 billion in 2020 to $39.7 billion in 2025, according to research firm Markets and Markets.
Officials at the MIIT have also linked the importance of blockchain for China’s ambitious Belt and Road Initiative, a sweeping international infrastructure plan vying to reshape the flow of capital and information across the Eurasian landmass.
Blockchain technology depends on decentralized databases that store vast quantities of coded information and can be implemented across a wide range of potential applications, including banking, currencies, healthcare and anti-corruption monitoring.
Cryptocurrencies, which are rooted in blockchain features, have come under fire in China recently as regulators move to reduce domestic production of new units of currency, known in the industry as “mining”. The country is currently the world’s largest generator of Bitcoin – the most widely used blockchain currency – representing over two thirds of global mining as of April of last year.
Officials in Beijing have cited concerns over cryptocurrencies being used for black market trading, illegal gambling, weapons purchasing and scams. Following new rules aimed at cutting back on domestic cryptocurrency production, recent days have seen the suspension of numerous related accounts on China’s Twitter-like Weibo.
Currently, there are around 75,000 blockchain-related enterprises in the country, according to Xinhua News citing Chinese corporate database Tianyancha.
The development immediately preceded a significant drop in the price of Bitcoin, falling from $37,800 on Saturday morning to a Tuesday low of less than $31,500. Its value has since stabilized and is currently selling at just over $34,000.
Amid the heightening clampdown of the country’s cryptocurrency industry, China’s monetary authorities have been working to develop and implement their own digital currency. The undertaking, involving a new state-run electronic payment system known as the e-yuan, stands to transform the conducting of business in one of the world’s leading consumer markets.