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Top Facts on China’s Crypto Yuan and Related Blockchain Projects

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  • Top Facts on China’s Crypto Yuan and Related Blockchain Projects

    The road to adoption is often a long and arduous one, and China seems to be the country making the biggest strides in the development and integration of blockchain-based technology on its home turf.

    In April, after several years of work, the Chinese government announced the completion of two milestone initiatives involving blockchain and cryptographic technology. The first initiative pertains to the country’s central bank digital currency, named DCEP, which is reportedly being tested in four local cities.

    The second development is related to Blockchain-based Service Network, or BSN, which is currently said to be fully operational. Meanwhile, China is also launching a grandiose plan dubbed the “Chinese Standards of 2035,” which outlines how the next generation of technology will be operated, including everything from telecommunications to artificial intelligence.

    Here are some of the facts about China’s two biggest developments related to blockchain and crypto, what their true goals are, and why they have little to do with the intrinsic concept of blockchain and crypto.

    Fact 1: Libra triggered adoption in China

    China has evidently been working on a way to accept blockchain and cryptocurrencies over the last four years despite its general negative stance on the latter tech.

    Musheer Ahmed, managing director at FinStep Asia — an advisory firm assisting fintech startups — explained to Cointelegraph that blockchain networks have been in development for over a few years in mainland China, with the Financial Blockchain Shenzhen Consortium, which was launched four years ago by top local firms such as Tencent and Huawei, being the first major initiative that engaged a host of private and state-owned companies:

    “With the development and use of blockchain in the FISCO consortium, one could say it was a successful proof-of-concept which is now being explored in an all-encompassing way with BSN. Secondly, with President Xi stating the benefits of blockchain and need for its deployment nationwide, it was but a matter of time before BSN was launched.”

    China’s President called for the country to accelerate its adoption of blockchain technology in October 2019, soon after Facebook CEO Mark Zuckerberg highlighted the threat of Chinese dominance that could grow with the emergence of its national cryptocurrency.

    Facebook’s announcement of its Libra coin launch seemed to have changed the stance of the Chinese government on cryptocurrency. The very idea of privately-issued coins being used by over 2.3 billion people worldwide unveiled new prospects on the use of digital currencies and gave governments around the world a peek at what the financial landscape of the not-so-distant future might look like.

    China took the lead in the race for its own central bank digital currency, outpacing its closest competitors. The central banks of the European Union, South Korea, Russia, Sweden and several other countries as well as the Eastern Caribbean Central Bank have also announced their own research into state-issued cryptocurrencies, but they are still at the legislation or trial stages, proving the paperwork falls second to action in China.

    Fact 2: The BSN is centralized

    A blockchain-based service network is the latest blockchain-related development from China, officially launching on April 25. In a nutshell, the BSN is a global infrastructure designed for helping blockchain projects launch applications at lower costs. The system can also be used for operating smart cities, digital economy platforms, database management and much more.

    Jeff Chu, the founding partner of BN Capital — a firm focusing on investment and consulting in the blockchain industry and digital economy — told Cointelegraph that the BSN aims to build up a new type of global service network and create cross-regional and cross-institutional information services based on blockchain technology.

    According to the latest data, the BSN has already attracted more than 2,000 developers and currently hosts 128 public nodes. All this looks like a typical decentralized structure, but it’s not the case with the BSN.

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