September 29, 2022

Bitcoin hailed as ‘success’ by China in dramatic shift in attitude

2 min read

A state-run newspaper in China has published a front-page story hailing bitcoin as the first successful application of blockchain technology.

The praise marks a significant shift in Beijing’s stance towards the cryptocurrency and comes as the country prepares to launch its own digital currency.

Monday’s edition of Xinhua went into detail about how bitcoin and its underlying blockchain technology works, describing it as “one of the hottest topics in recent years”.

China has been slow to acknowledge the potential benefits of cryptocurrency compared to other countries and has typically taken a hardline attitude towards the industry.

In September 2017, as bitcoin was heading towards its record high price, Beijing introduced a ban on all cryptocurrency exchanges to prevent citizens from purchasing digital currencies with Chinese yuan.

China’s change in policy towards cryptocurrency and blockchain began earlier this year, prompting rumours that the country was close to unveiling plans for its own state-backed token.

In October, after years of an effective blackout on the subject, adverts for blockchain course began to appear on popular Chinese apps and across social media sites. Days later, president Xi Jinping described the technology as an “important breakthrough” that should be developed.

A law is also set to be introduced in January that will “facilitate the development of the cryptography business and ensure the security of cyberspace and information”.

This is expected to precede the launch of China’s cryptocurrency, which is being developed by China’s central bank. Previous positive sentiment from China has been credited for boosting bitcoin’s price, however the latest market movements suggest bitcoin’s value has been unaffected.

China may not not be the only geopolitical power to launch a cryptocurrency next year, after it was revealed last week that the European Union is considering a proposal for its own digital currency.

Draft documents from the European Central bank urged the EU to “explore the opportunities” afforded by the new technology.