There is ongoing blockchain frenzy in China. It all began when China’s President Xi Jinping announced that blockchain technology would play a pivotal role in the nation’s innovativeness. Shortly after that, there was a surge in interest in the blockchain in all regions of China. This was most visible on Chinese social media platforms. On the popular WeChat platform, interest in the word “Bitcoin” grew three-fold while interest in the term “Blockchain” grew twelve-fold.
Another indication of the ongoing frenzy is the price surge of stocks with any blockchain elements on the Shanghai Stock Exchange. Since Xi’s announcement, numerous stocks have broken through the 10% limit. Even stocks trading overseas were caught up in the frenzy. A stock listed on NASDAQ under the XNET ticker that has blockchain elements saw a price rally of 100%.
This is A Major Shift from China’s Previous Stance
A few years ago, China was the global center for the cryptocurrency sector. However, the nation did not trust the concept of digital currencies over which it had no control. As a result, it decided to ban them partly due to their speculative nature of the assets and the risk they presented to the government control over money.
When the Chinese government announced it would impose a total ban on crypto trading, some major exchanges such as Binance, decided to seek greener pastures elsewhere. The government’s ban came into effect around December 2017 when China cut off all traffic to crypto exchanges. The result was that Bitcoin trading in Yuan fell by almost 99%, which led the country to conclude that its ban had been a success.
However, China appears to be warming up to some of the aspects that power cryptocurrencies, the blockchain. President Xi Jinping recently announced that the nation would focus on blockchain technology as a core technology in its innovativeness. He went on to talk about some of the benefits the technology has to offer in various fields such as education, food security, and finance.
A Call for Calm
A recent Reuters report claims that the Chinese People’s Daily newspaper recently had an article that was calling for people to stay calm when it came to the blockchain. The newspaper wrote that while blockchain technology was here, it was important for Chinese citizens to remain rational. This may have been in reference to the activity that is taking place on the Shanghai Stock Exchange. The newspaper went on to state that while Xi was in support of the blockchain, it was not an indication that China supported cryptocurrencies.
Too Little Too Late
The Chinese newspaper’s call for calm may have come too late. Interest in cryptocurrencies such as Bitcoin remains high on Chinese social media. In fact, most altcoins associated with China haze seen a meteoric rise in the past few days. Some have seen their prices grow by double digits. Even major institutions have been caught up in the frenzy. For instance, a recent report indicates that China Merchant Bank has invested in BitPie.