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Next China: Who dominates blockchain?
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Next China: Who dominates blockchain?

Here’s a surprising sentence: the Politburo of the Communist Party of China held a special meeting to learn more about blockchain.

The first reason that’s surprising is who. The Politburo is made up of China’s 25 most-senior officials, mostly in their sixties, and traditionally not a group known for being tech savvy.

Second is what. While blockchain is not only about cryptocurrencies, cryptocurrencies have been the most widely used application of the technology. And China essentially banned digital currencies in 2017, which is where the third surprise comes in.

Is China now throwing its weight behind blockchain and could this foreshadow some loosening of the ban on digital currencies? Markets seemed to think so, pushing up shares of Chinese companies linked to the technology and also the price of Bitcoin.

Bitcoin Price Jump

But maybe we shouldn’t be surprised at all. Technology is obviously a crucial part of Beijing’s plans for the future and blockchain is potentially as important a field as artificial intelligence or big data, two topics the Politburo has also met to discuss. 

China’s central bank helps explain why. The People’s Bank of China has expressed concern about the impact that a cryptocurrency outside of its control might have on the economy and the financial system. That’s one reason it’s hard at work on its own digital currency, so that China won’t be forced to adopt a technology developed abroad.

And if you listen to Facebook, the opposite is also true. The social media company has begun to argue that if U.S. regulators stymie its plans to release its own cryptocurrency, it could contribute to China building a global digital currency first and America falling behind.

Let’s hope the crypto wars of the future aren’t too devastating.

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