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China Continues to Flip on the Blockchain’s Legal Status?

November 5, 2018

 

In an overarching sense, China’s true view on whether or not the Blockchain should be taken seriously and given a legal status seems hard to puzzle out. Last year, the Chinese government effectively banned everything related to Cryptocurrencies, most recently centering their efforts around the WeChat messaging app, which has become a sort of national payment ecosystem for Chinese citizens.

 

At the same time, various reports seem to have credibly indicated a high level of support for Blockchain technology in the Chinese government, even extending to XI Jinping himself. In trying to understand what China really thinks about the Blockchain industry, it may be said to be important to start by making two key distinctions clear. First, it is logical to state that there is a difference between the possible legal status of the Blockchain and the possible legal status of Cryptocurrencies in a global sense. Despite the fact that Cryptocurrencies directly depend on and come from the Blockchain, they represent something else entirely in the context of their primary use case. In short, Crypto is a new form of money. The Blockchain alone, is a revolutionary technology in terms of use cases related to trust, transparency, and increasing security for customers, businesses, and even governments, worldwide.

 

Because of this, we can conclude that countries can accept the Blockchain as legal and useful without accepting Cryptocurrencies in the same way, at least for now. Keep in mind that even though China appears to be blocking Crypto while accepting the Blockchain, the true situation is still a bit more complicated than that. One reason for this is that Chinese banks are reportedly developing a Stablecoin based on the Yuan, which we have mentioned before.

 

On top of all of this, it was publicized today that the People’s Bank of China, which seems to act as the country’s authority in the financial sphere on all things Crypto, has basically recommended that the country work harder to stop airdrops as well. As time goes on, it is logical to conclude that they will succeed in doing so, as they seem to have done with stopping ICOs from launching in mainland China. In the end, however, bans of decentralized technologies can not last forever because of what these items are.

 

Eventually, the Chinese government will most likely be compelled to take a more lenient approach as offerings like decentralized exchanges that depend wholly on users to function become more prevalent.

 

 

 

By: BGN Editorial Staff

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