People’s Daily News Advises Calm as Blockchain and Crypto Speculation Swell in China Following Endorsement by President Xi Jinping

Chinese state news site The People’s Daily is advising Chinese investors to be “rational” despite excitement raised by President Xi Jinping’s recent remarks endorsing, “accelerate(d) development of blockchain technology and industrial innovation.”

According to Reuters, The People’s Daily urged Monday:

“Blockchain’s future is here but we must remain rational.”

The People’s Daily also advised the Chinese population not to confuse state enthusiasm for “blockchain,” a type of distributed ledger with encryption features, with an endorsement of cryptocurrencies such as Bitcoin, which have be under progressive ban in China since 2016:

“The rise of blockchain technology was accompanied by that of cryptocurrencies, but innovation in blockchain technology does not mean we should speculate in virtual currencies.”

The price of Bitcoin, flat in recent weeks, surged last Friday following Xi Jinping’s remarks.

Chinese stocks listed using the term blockchain also surged, though some of the projects appear to have only just started using the term.

Two days ago, New York crypto investor Katherine Wu tweeted:

“My dad (who lives in China) told me that there is a company called ‘Blockchain Group’ listed on the Hong Kong stock exchange and asked me if I knew about it. Surprised, I looked it up—didn’t think it’d happen already! …it’s a goddamn tea company that changed it’s name.”

Reuters also says that stockbrokers in China are being advised to help deter securities fraud involving purported “blockchain” stocks:

“(T)raders from three Chinese brokerages…(said) they received a notice from the Shanghai Stock Exchange on Monday which said, ‘for any blockchain-related (topics), we ask listed companies to make statements based on facts and not make any exaggerated claims or create vicious hype.’”

Oddly, China’s sudden full-bore official endorsements of blockchain have also been accompanied, according to Chinese Twitter news source cnLedger, by a ban on content critical of blockchain.

“Blockchain” was hugely hyped in the West before, during and after the crypto craze of late 2017, in part due to large amounts of investment money flowing into “blockchain” startups from the general public via ICOs (initial coin offerings).

Much of that money appears to have been spent on marketing before the remainder was more-or-less squandered. Bitcoin, a “public blockchain” designed to skirt capital controls, has a devout following. But to date, an enterprise-grade “blockchain” product has yet to revolutionize private record keeping.

As well, vast majority of “blockchain” projects that ICO’d in 2016 and 2017 are now defunct.

Some firms continue to be excited about how blockchain may help streamline “back office” function in payments, securities, and supply chains.

But murmurings persist from less commercial corners of tech, where certain technologists say that encryption-enabled SQL databases and the like can outperform cryptocurrency-style blockchains in commercial and government settings.

 

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