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China Vs USA: Who is Winning the Blockchain Battle?

China Vs USA_ Who is Winning the Blockchain Battle_

China and the US are the superpowers of the 21st century and their respective blockchain innovations have both countries at the top of the technological leaderboard. As the two countries face off in a highly publicized trade war, many people are also looking to see which nation is winning the blockchain battle.

The blockchain jobs on offer

One way of comparing the industries is to examine the blockchain jobs on offer in each country. Right now, it looks like the US has got the upper hand. According to data compiled by The Next Web, nearly half of the related jobs on recruitment site Glassdoor globally were based in the US, followed by the Uk then India.

With the caveat that glassdoor is a US-based company despite hosting international job posts, China had just 42 positions advertised compared to the US’s 2,616.

Notably, the top three employers are IBM with 110 open positions, followed by Ernst & Young, Oracle, and Deloit– all well established corporate giants in the technology world.

Opposing government approaches

Where China may be superior, however, is its government’s commitment to promoting the development of the technology and President Xi Jinping’s open support for blockchain, calling it a ”breakthrough” technology. Following his positive comments, the state-controlled media station CCTV ran a one-hour special explaining that “the value of blockchain is 10 times that of the internet”.

The People’s Bank of China, the country’s central bank, has spearheaded blockchain testing in finance, and there is a general consensus from the experts that when it comes to core technological developments alone, China is beating the US.

China’s rapid industrialization and development as a nation since the 1980s shows just how powerful the government’s commitments have been, as well as demonstrating the benefits of a having heterogenous authoritarian leadership no matter how controversial this concept may be.

The influence of crypto

Neither country has what would be described as pro-cryptocurrency policies, but the Chinese government has taken a much harder stance. Regulations prohibit financial firms holding or trading cryptocurrencies, and while trading platforms were effectively banned in 2018.

In the US many states are also pursuing regulatory efforts to cover cryptocurrency instruments but cryptocurrency trading remains legal, as does holding initial coin offerings unlike in China.

While cryptocurrency only accounts for a percentage of blockchain use cases, the inability of start-ups to explore tokens and digital currency without fear of government intervention sets China back in terms of what blockchain development teams can work with. In mid-April last year, police in Shanghai went so far as to stop an event for cryptocurrency entrepreneurs.

There is no clear frontrunner in the blockchain race as it stands, but many pundits are focused on China’s robust development policies and quality of innovations so far despite the US’s upper hand for cryptocurrency.


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People’s Bank of China Looks for Crypto Experts to Join Ranks

China’s central bank is seeking four cryptocurrency specialists that can assist the bank in developing a platform to facilitate crypto transactions.

The Digital Money Institute at the People’s Bank of China (PBoC) appears to be looking to expand its operations further into the field of cryptocurrency with its new recruits, two of whom are required to join as engineers, as well as two experts in economic law and finance.

In an advertisement placed on PBoC’s website, the engineers are said to be needed to develop both a big data platform and a chip processor. Specific responsibilities are listed, including developing the required software systems, encryption technology and security models, as well as research and development of the terminal chip technology that will facilitate the cryptocurrency transactions.

The legal and financial experts are required for legal research aspects, cited as including analysis of risk management and economic mechanisms.

In the wake of recent reports that PBoC is looking to launch its own stable coin, the job advertisement also lists policy research on ”legal digital currency” as a requirement of the successful applicant.

Earlier this week, an op-ed published by PBoC affiliate publication CN Finance called for China to launch its own yuan-backed stablecoin in order to prevent any negative externalities of US-backed stablecoins on other fiats.

The article outlines the benefit of having such a stablecoin: ”[it] uses the advantages of blockchain technology as much as possible, while trying not to challenge the legal currency, basically bypasses the commercial bank, and implements global cross-border payment.”

The PBoc has issued multiple warnings to investors regarding the dangers of cryptocurrency trading and has issued a national ban. The CN Finance op-ed advises that the ban remains firm alongside a yuan stablecoin.


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Major Chinese Study Reveals Positive Economic Impacts of Blockchain on Economy

A recent report from a leading Chinese research institute under China’s Ministry of Industry and Information (MIIT) and Tencent Holdings has concluded that blockchain technology will have a “profound impact” on creating a legal digital currency and drastically improve financial services.

Blockchain above all else

Other than blockchain technology itself, China has held a rather strict stance on initial coin offerings (ICOs), cryptocurrencies and exchanges. In late 2017, the People’s Bank of China (PBoC) banned ICOs, deeming them an “illegal fundraising” method, then shortly after in February 2018, banned cryptocurrency trading entirely.

However, China is growing fond of the underpinning technology that powers ICOs and cryptocurrencies. In recent months, there has been a notable rise in blockchain related activity in the country, with rises in blockchain-named companies increasing by 500% and even the PBoC adopting the nascent tech.

Economical enhancements

The 24 July report that was produced by The Academy of Information and Communications Technology and Tencent Holdings has eight key conclusions, one being that “blockchain will play a positive role in the financial system”.

However, it states that the application of the tech in finance is presently limited to offering new solutions for “the issuance and circulation of asset equity certificates under a new perspective”.

It also adds on the matter, saying that, “Blockchain directly affects currency circulation and financial instruments, and indirectly brings changes in financial market and financial market operations. These two points are two major innovations. At the same time, financial market operation efficiency is improved.”

The study gives nod to the value of blockchain in supply chain finance, which is often cited as a facet of businesses that will benefit most from blockchain.

Fascinatingly, the study raises eyebrows by mentioning a legal digital currency that can operate basic functions such as “a trading medium, pricing unit and value storage”.

Blockchain can be the tech that makes this a possibility. The study writes, “The blockchain pair will have a profound impact on the establishment of the legal digital currency issuance and circulation mechanism.”

In addition to these, it concludes that blockchain will greatly impact payment and settlement, securities trading, insurance and credit reporting.

Investment in the chain

The report is timely as the drive in China for blockchain adoption is at an all-time high. In recent months, governing bodies of Chinese cities have been investing incredible amounts of funding into blockchain startups and academic innovations.

Nanjing recently announced a USD 1.48 billion fund for academic innovations, blockchain startups as well as companies who are seeking to integrate technology into their businesses. In April, Shenzhen received USD 80 million for blockchain startups in the city, and shortly before, Hangzhou was the recipient of a USD 1.6 billion blockchain innovation fund.


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China’s Central Bank Develops Blockchain-Based Checks to Combat Fraud

The Digital Currency Research Lab headed by Di Gang at the People’s Bank of China, China’s central bank, has developed a system that issues digital checks using blockchain and smart contract technology. This follows a year-long effort that began in 2016 in order to combat check fraud in the Chinese market.

The digital checks exist on the blockchain in the form of smart contracts that are automatically enforced. Since the blockchain is an immutable ledger, this reduces transaction risks since it would be extremely difficult to forge a check. China has been suffering from check fraud since there are a large number of intermediaries that issue checks, giving fraudsters lots of different types of checks they can forge, and this has been undermining the Chinese economy.

The proposed blockchain-based digital check system organizes all different types of Chinese checks into one network, making it easy for regulators to set rules and keep track of what’s going on.

Each digital check is a piece of code that contains the check’s data and business logic, and will have capabilities including endorsement transfer, discounting, transfer discounting, and redemption. These capabilities are realized through smart contracts.

The blockchain nature of this new system for issuing checks gives consumers and regulators a transparent view of the lifecycle of a digital check. This is also helpful for judicial proceedings following bad business deals since everything involving a check will be easily accessible on the blockchain.

The proposed system will only take seconds to confirm a check, rapidly accelerating the speed at which checks are processed in China. Also, the encrypted data will be highly protected, with blockchain’s cryptographic features yet to be breached easily.

A prototype of the blockchain-based digital check system was already successfully tested in 2017. It is unknown when the system will go into operational real-world use. Regardless, it is a positive sign from the Chinese central bank, as it appears to not only be embracing blockchain technology, but accelerating its advance and finding new uses for it.


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