Is China emerging as a global leader in blockchain?

Last month, Chinese leader Xi Jinping gave a speech on the value of blockchain technology, calling it “an important breakthrough,” and promised China would “seize the opportunity.”

Following the speech, government-sponsored news outlets began publishing pro blockchain content, cities announced educational funds, and censors declared that calling blockchain a scam on social media is now forbidden.

The Chinese were quick to react to the news, investing in anything blockchain-related and quickly driving up stock prices. The crypto market also benefited from the hype, with Bitcoin gaining more than $1,000 in the 24-hours following Xi’s announcement.

The government’s endorsement of blockchain technology comes after reports that the People’s Bank of China (PBOC) is launching a Digital Currency Electronic Payment System (DCEP) to replace cash. If true, China would become the first major economy to release a native digital currency.

Across the Pacific, the U.S is taking a very different approach. A day before Xi’s speech, Mark Zuckerberg sat in front of Congress to defend Facebook’s proposed digital currency, Libra. The response to his testimony was overwhelmingly negative and pressure from U.S. Senators pushed major supporters like MasterCard and Paypal to back out of the project altogether.

China’s new outlook on blockchain technology is leading some to believe that it’s positioning itself as a global leader in the space and that the U.S may fall behind. Despite China’s advancements, the government has yet to reverse its laws banning crypto exchanges and ICOs.

Kevin Werbach, a professor at the University of Pennsylvania, believes China’s digital currency is likely another means of government censorship. “China, the world’s biggest censor, has no love for “censorship-resistant” permissionless cryptocurrencies. It understands the threat that stateless money poses to capital controls and other mechanisms of power over a national economy,” he wrote.

Time will tell which country emerges as the leader in blockchain and cryptocurrencies. Still, one thing is for sure; Bitcoin is the first successful application of blockchain technology. Just ask the Chinese newspapers!

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