Over the past week or so, blockchain has hit many headlines in the media, not just in China. People are talking that the Communist regime wants to embrace blockchain, the technology that verifies cryptocurrency transactions.
Last Thursday (Oct. 24), President Xi Jinping delivered a speech about the importance of blockchain and the need to accelerate the development of the technology in China in a wide range of sectors, during a “study session” for some of the Chinese Communist Party’s most senior members.
Flattering officials from the Central Bank wasted no time to urge the the country’s commercial banks to “step up their application” of blockchain and “embrace digital finance.”
It seemed that China has advanced to the front of blockchain technologies and gained an “edge over other major countries” without putting into much further efforts.
After the remarks of President Xi run out of the press, highlighting the potential of the technology underpinning digital currencies, they fueled a surge in related stocks and bitcoin, which briefly topped $10,000.
Bitcoin, the most popular digital currency, rallied to hit $10,000 late Friday evening Eastern time. By Monday morning, it traded at about $9,370, according to CoinDesk, after trading just below $7,500 before Mr. Xi’s comments were made public. The price has more than doubled this year but remains below its high of near $20,000 in December 2017.
China’s media reported that the immediate aftermath of the speech caused a serious pump in bitcoin price, producing the fourth biggest daily price gain ever. Online interest in China has remained high, with searches for ‘Bitcoin’ on Weibo, WeChat and Baidu showing net positive gains since last week.
Several major Chinese-born cryptos, including Qtum, Vechain, Ontology, NEO, Tron and Bytom, were also enjoying strong gains on Monday, ranging from 25 percent to 90 percent.
Hailed as a technology innovation with industrial opportunities
President Xi said that as governments worldwide have stepped up their efforts in developing blockchain, China should follow suit and allow the country to have greater say in forming global standards for the technology, according to a transcript (link in Chinese) published by state news outlet Xinhua.
The state-run news agency quoted Xi as saying that blockchain would serve “an important role in the next round of technological innovation and industrial transformation.”
South China Morning Post reported that China’s new appetite for blockchain after it was endorsed by President Xi Jinping could see the technology be given its own commemorative day, although some analysts remain sceptical over its use.
China is against trading in cryptocurrencies and fundraising through new initial coin offerings, citing the threat they pose to the country’s financial stability.
But some analysts are worried about the increased interest, with many utilising the opportunity to advance their personal goals, while investors are starting a new round of financial speculation.
Huang Qifan, former major of Chongqing and a major promoter of the country’s digital currency, is confident that China’s central bank approved digital coin was far more likely to succeed while Facebook’s Libra is ‘delusional’ project that will never succeed.
President Xi is for sure mostly blind when it comes to technology. Is the technical bureaucrat Mr. Huang trustworthy with his understanding of the blockchain technology? Most people would question him in that as well.
Blockchain fever and Orwellian Dystopia
“Xi’s rushing to touch upon [blockchain technology] and fueling the blockchain fever shows that he couldn’t find other feasible stories to boost the local economy,” said a Chinese economics professor who spoke to VOA on the condition of anonymity to speak freely about Chinese economic policy.
Some bitcoinists said China’s blockchain future is nothing but an Orwellian dystopia. To the Communist government, the call for blockchain technology innovation is more a political task than a technical development.
As the ruling Communist Party began its long-awaited Fourth Plenum this week — a four-day closed-door meeting that is expected to set major policies for years to come and discuss the Hong Kong crisis and the trade war with the United States, this blockchain fever is just another game for the CCP to cut leeks and do harm to more ordinary Chinese.
In the lead-up to the plenum, President Xi has called for the whole country to urgently invest in blockchain technology, the innovative but still largely unproven technology behind Bitcoin and other cryptocurrencies. Some analysts are taking President Xi’s proposal as a long-shot bid to stimulate an economy that has been hard hit by the trade disputes.
Funny to see that following Xi Jinping’s bombshell speech last week, the CCP government released a decentralized app (dapp) for its members to attest their loyalty on blockchain.
According to a post from the CCP’s propaganda office on Saturday, the dapp, in literal translation called “Original Intentions Onchain,” allows its members to pledge their allegiance to the party and store it on a blockchain, which can be shared and seen by others.
In spite of the fact that the state-run CCTV cautioned viewers on Saturday to calm down and not take Xi’s words as endorsement for all cryptocurrency, many “leeks” have rolled up their sleeves to dig for the “golden opportunity.”
CCP killer Guo Wengui said the CCP’s 4th Plenary Session has nothing to do with the Chinese people. It is a game of the CCP leadership to relocate power after taking down some opponents and promoting a few close confidants. Blockchain is only a chess piece of the CCP to deal with the people.
Behind the introduction of fever-like blockchain, the CCP is to tell that it governs everything. Moreover, CCP wants to direct the world’s attention from its own crisis in Hong Kong.
By Cloudy Seagail