Daniel Slotta
Research expert covering Greater China
Blockchain in China - statistics & facts
China's blockchain industry has had a tumultuous history, thanks to the country's erstwhile status as a global center for cryptocurrency mining and digital assets. However, a government crackdown on crypto trade and mining activities saw the emergence of blockchain applications grounded in established industries. This move, paired with China's focus on research and innovation, underscores its commitment to becoming a major player in the blockchain industry.
In the shadow of the cryptocurrency industry, Chinese tech giants and start-ups laid the foundation for a vibrant blockchain industry. Notable start-ups include VeChain, NEO, Ontology, and Bytom. These companies leverage blockchain technology to create decentralized platforms, enable secure transactions, and improve transparency and efficiency in business processes. They are supported by a vibrant blockchain ecosystem in China, which includes incubators, accelerators, and venture capital firms that provide funding, mentorship, and resources to help them grow and succeed.
Under this centralized oversight, the blockchain industry faces an internal dilemma. On the one hand, blockchain promises the construction of a decentralized and private system, but requirements for registration with the authorities and the possibility of artificial intervention undermine some of the core characteristics of the technology. However, by moving away from the speculative and predatory side effects of cryptocurrency, the blockchain technology can find its application in established industries. In addition, companies can align the technological benefits of the blockchain with the political and economic realities of the Chinese system .
Life after crypto
China's cryptocurrency industry enjoyed significant growth in the early 2010s due to favorable conditions such as cheap energy and the ability to circumvent capital controls. However, regulators in Beijing decided to ban crypto trade and mining due to concerns around energy consumption and capital flow restrictions. Despite the ban, an active underground crypto-mining industry persisted, and domestic mining activity resumed after a temporary halt.In the shadow of the cryptocurrency industry, Chinese tech giants and start-ups laid the foundation for a vibrant blockchain industry. Notable start-ups include VeChain, NEO, Ontology, and Bytom. These companies leverage blockchain technology to create decentralized platforms, enable secure transactions, and improve transparency and efficiency in business processes. They are supported by a vibrant blockchain ecosystem in China, which includes incubators, accelerators, and venture capital firms that provide funding, mentorship, and resources to help them grow and succeed.
Balancing privacy and security
The Chinese government has taken a measured approach to placing guardrails on the blockchain industry. Introduced in 2019, the "Blockchain Information Service Management Regulation" set up rules for blockchain projects. Companies have to register all projects with the Cyberspace Administration of China (CAC), which is also responsible for their supervision and inspection. Most impactful are the requirements to store user data for up to half a year and the responsibility for the blockchains' legal compliance.Under this centralized oversight, the blockchain industry faces an internal dilemma. On the one hand, blockchain promises the construction of a decentralized and private system, but requirements for registration with the authorities and the possibility of artificial intervention undermine some of the core characteristics of the technology. However, by moving away from the speculative and predatory side effects of cryptocurrency, the blockchain technology can find its application in established industries. In addition, companies can align the technological benefits of the blockchain with the political and economic realities of the Chinese system .
