China has kept a relatively hawkish stance on cryptocurrencies, refusing to give up the power to a digital asset that would completely undermine the rule of the party. Instead, the country has focused on working around cryptocurrencies by banning them flat-out. However, China has been prescient enough and in its attempts to extricate itself from the current financial order, the country has sought ways to completely overhaul the established financial order instead. The upshot is quite telling. Today China spearheads the digital revolution completely unabashed.
The Chinese Status Quo
China has been toying with the idea of bringing around a digital revolution for a very long while now. The country has been developing its structures to be completely compatible with the latest needs of its own economy. China has been remarkable in supporting its minnows of producers. It doesn’t matter whether you grow apples in some far-flung, remote province or find yourself next to a vibrant metropolitan hug.
In the last decade or so, China has done outstandingly in bolstering its economy and developing an inclusive approach, underscored by the rapid expansion of the e-marketing retailer Alibaba.
Despite the outright ban on cryptocurrencies, China has not bulged where its economy is concerned. The country is still very much on track to introduce blockchain solutions and even a centralized crypto FIAT currency, which will be controlled by the People’s Bank of China the country’s central financial body.
The New Chinese Revolution
Meanwhile, the State Council of China has been busy. The institution has spared no effort in the further digitalization of the country. In fact, the Council has ordered the local financial authorities and government-funded research centre to push ahead with their focus on the blockchain development. The acceleration of blockchain commercialization has been quite important to the overall state of affair China has found itself into.
The official statement of the Council was released on 24 May, and it has highlighted the importance of making sure that China has the necessary infrastructure to further develop its operations, which will, in no small degree, determine the future of its financial system. According to CNN, the State Council of China’s statement had a paragraph that read as such:
“To build a regional equity market in Guangdong, according to the opening up of the capital market, timely introduction of Hong Kong, Macao and international investment institutions to participate in transactions. We will vigorously develop financial technology and accelerate the research and application of blockchain and big data technologies under the premise of legal compliance.”
As it becomes obvious from the excerpt, China is focused on creating a financial system that can support the heft of digital transactions that are slightly shifting into the limelight. With the support of all these assets, the country may ultimately wriggle itself free from the financial clout of the US Dollar as the only viable reserve currency.
Speed Ahead with Blockchain Development
It is quite unlikely in fact that China will abate its efforts now. The Chinese government has signalled a pro-blockchain sentiment, backed by multi-billion dollar initiatives. In April, Hangzhou city government funded the Global Blockchain Innovation Fund with the respectable $1.6 billion.
In addition, the Guangdong Pilot Free Trade Zone has been encouraging the development of blockchain projects that would be free of the taxman’s supervision for a while. Overall, the hub hosts 71 blockchain start-ups that deal with various technologies, including blockchain, AI, and Big Data.
Meanwhile, China has managed to achieve another feat worthy of a mention. The country has created a number of blockchain that is currently co-existing with their mainstream counterparts creating a powerful and very much meaningful latticework of functioning economy that is propelled by traditional and innovative players.
Meanwhile, a local analyst has been eager to point out that China hasn’t in fact stalled the development of any innovative technologies and the country is firmly behind the idea of bolstering anything that promises to further boost its competitiveness against western rivals. This has already been signalled on multiple fronts, including additive manufacturing, space exploration, and telecommunications.
Alibaba’s inexorable push ahead in the realm of technology and finance has also been absolutely telling about the future of digital technologies in China and beyond.
According to Zigor Aldama, an award-winning journalist covering the financial industry in China, the country is years ahead of the development of its financial system. Mr Aldama has spoken to Open founder Luis Galan, saying:
“I believe cash will eventually disappear in the way we know it now. With current biometric systems, it’s just a matter of time before we won’t even need a device to pay. Our fingers, our irises, even our ears will be payment devices. But that means it will be possible to keep track of all the things a user buys in real time – not only what but also where and when.”
Frightening as it may be, the future of the financial order seems to be cashless. This is also a trend in Western Europe where people are increasingly reliant on their debit/credit cards to pay, although they are struggling to embrace all the necessary changes to put them at the forehead.
China, on the other hand, doesn’t seem to experience similar qualms.
Inexorable in its Revolution
China will not cede power to everyone where its own sovereignty or financial clout are concerned. The country has been quite the proponent of all sorts of changes that are necessary for it to forge ahead and to bring the latest innovation in the world of crypto currencies. With this in mind, the occasional observer cannot help but wonder – why? If China becomes such a blockchain-based financial behemoth, would it be self-sufficient, or would it need any ties abroad?
Presently, Chinese companies are expanding rapidly across the globe and commanding formidable investment across a number of industries. In fact, they are present in all industries as it is. The newest additions to the Chinese financial system are just the beginning of a world where the FIAT cryptocurrency will be king.
The Price to Pay
China pretty much writes its own rules. The relatively limited freedoms in the country have made it possible for the government to deal away with any hurdles and online malfeasants who may seek to impede progress.
The country has been quite capable to write the laws which ought to be followed by everyone for the greater good of the nation. Frightening as this may sound, it has been highly efficient and it has changed the country to reach the highest echelons of modern life.
With the advancement of technologies, China has put itself ahead of the world, but also has created a financial order that may not be readily shared with others. With this in mind, will China ever seek to lead the world into the future of the financial system, or will the country use it to have clout over how the rest of the world deasl with its money. In a truly U.S. way, China may now be a digital behemoth with very tangible consequences for the rest of the world.
With a divisive west, it’s hard to imagine that any western party can even begin to catch up to the tremendous progress China has made.