China to focus on blockchain technology development, despite cryptocurrency ban
Given China’s ban on cryptocurrency since 2021, many would assume that the country would be behind in blockchain technology. In reality, blockchain has a lot more use cases than just empowering cryptocurrency and China is about to make the most of it. Over the years, more industries continue to work with tech companies to see how blockchain can improve their efficiency and productivity.
Some of the most common uses of blockchain outside of crypto today are in the finance industry, healthcare, automotive, government services and retail industry as well. In finance, for example, blockchain can be used for cross-border payments and funds management thanks to its transparency and traceability features.
While blockchain use cases have already been adopted by some organizations, there’s a growing demand for more capabilities. Tech companies around the world continue to research the technology, with many announcing new capabilities and breakthroughs.
Looking at blockchain investment, in 2021, a total of US$33 billion was invested in blockchain startups, with 43 of them moving on to become unicorns valued at over US$1 billion, according to Galaxy Digital, a crypto investment research firm. In 2022, more than US$30 billion were invested in crypto and blockchain startups. However, the amount of deals has declined every quarter in 2022.
In fact, one of the biggest announcements of bloclchain no longer serving any purpose came from shipping company Maersk, late last year. In November, the company announced that it is looking to withdraw its offerings and discontinue the TradeLens platform. The TradeLens platform was announced in 2018 and jointly developed by IBM and GTD Solution, a division of Maersk, as a blockchain-enabled shipping solution designed to promote more efficient and secure global trade.
Despite this, tech companies are still working on other blockchain use cases globally. Among the countries that are leading blockchain research and development include the US and the UK. In Southeast Asia, Singapore and Japan have been increasing the adoption of blockchain technology in industries as well.
As such China, which banned the use of cryptocurrencies in 2021 and imposed strict penalties on anyone using or working with cryptocurrencies, is also now looking to conduct more research and development in blockchain technologies. According to a report by SCMP, China’s ministry of science and technology has approved the establishment of the National Blockchain Technology Innovation Center (NBTIC). NBTIC will focus on developing software, hardware and fundamental theory on use cases that can benefit China’s economy.
Citing local newspaper reports, the new center will also focus on major use cases related to personal livelihoods, with the blockchain expected to be an important foundation for China’s new digital infrastructure. The establishment of the center comes at an interesting time, with China already having about 1821 blockchain companies in legal, financial, agricultural and intellectual property protection projects as of July 2021.
SCMP also reported that the NBTIC will be led by the Beijing Academy of Blockchain and Edge Computing, which is backed by the Beijing municipal government. The academy is already known for developing an enterprise blockchain called ChainMaker, which is equipped with technology to resist attacks from both classical and quantum computers.