China Gives Digital Currencies a Reprieve as Beijing Warms to Blockchain

0
8
China Gives Digital Currencies a Reprieve as Beijing Warms to Blockchain

Business|China Gives Digital Currencies a Reprieve as Beijing Warms to Blockchain

Officials reversed a plan to outlaw the business as the government explores issuing its own e-currency.

Credit…Giulia Marchi for The New York Times

Cao Li

HONG KONG — Blockchain is back in Beijing’s good graces.

Chinese officials have quietly removed the business of making Bitcoin and other cryptocurrencies from a list of hundreds of industries that Beijing plans to outlaw. In April, the practice appeared on a list of industries that would be denied benefits and subsidies from local governments, leading to worries in China that a popular and lucrative business would dry up.

But making digital currency — a practice known as mining — was not on a final list released on Wednesday. It was not clear why the National Development and Reform Commission, China’s top economic planning agency, had removed Cryptocurrency mining from the list, and officials there could not be reached for comment on Wednesday.

There appears to have been a significant shift in how China regards the unproven world of digital currencies. Even President Xi Jinping appears to have warmed to the technology, though Beijing may accept cryptocurrencies only in ways that it can tightly control.

Last month, Mr. Xi endorsed studies in Blockchain, the underlying technology that allows a Cryptocurrency like Bitcoin be tracked across a wide network of computers. Electronic payments are typically tracked by a centralized system like those run by PayPal or similar companies, giving those firms great control over the digital flow of money around the world.

According to state media, Mr. Xi told top Communist Party leaders that the technology was at the heart of China’s innovation and “key to increasing China’s influence and rule-making power in the global arena.”

Cryptocurrency makers and watchers said the comments were most likely meant to pave the way for China to create its own digital currency, both to tighten controls as well as to make China’s currency more readily available outside the country.

The comments led to a surge in interest in China. Investors sent shares of local digital currency-related companies soaring, while Cryptocurrency stalwarts rejoiced.

Read More

Leave a reply