2021-12-15 00:15:11
The Chinese Government's comprehensive crackdown on crypto may, at first glance, seem like a stifling of innovation. But this couldn't be further from the truth. In reality, unregulated speculatory coins run counter to China's plans for its digital currency.
They have restricted such assets in their country and are creating the basis for a new financial structure. One based upon their upcoming Digital Yuan and the creation of a blockchain service sanctioned by the state itself. This, along with the integration of powerful new blockchain partners, looks to help China — and potentially the rest of the world's economies — debut their digital currency.
China's Ongoing Stance Against Cryptocurrency
Over the last several years, China has placed numerous bans on cryptocurrency — 19 to be exact — each with increasingly strict laws concerning its use in the financial system. In September, the Chinese Government offered a final, conclusive stance on cryptocurrencies — banning all mining operations and making it illegal for any business to transact with these assets.
While individuals owning cryptocurrency have not been outlawed definitively, it has left precious few avenues for them to acquire or sell cryptos, effectively shuttering the industry inside of China.
This is not just an arbitrary distaste for crypto assets, mind you, but part of a much broader vision of the Chinese Government. See, China may not like crypto, but they do like blockchain technology.
They have been relatively vocal about this for some time and are also rolling their sovereign digital currency, dubbed DCEP. This Central Bank Digital Currency, or CBDC, will leverage the features of blockchain to give the Government complete oversight and control of the monetary supply.
Enter the BSN
This isn't just about mainland China either; it's about China's place in the evolving global economy. The state-backed "Blockchain Services Network," or BSN, has emerged as a means for China to secure its dominance in the blockchain arena. The BSN is one of the only government-sanctioned blockchain networks globally and certainly the most developed.
Backed by Beijing and various state-owned companies like China UnionPay, China Mobile, and China Merchants Bank, BSN provides an affordable and composable platform where developers can leverage blockchain technology to build decentralized applications (Dapps).
This stands to place China at the forefront of blockchain innovation but doing so in a way that is regulated and under official oversight. This is in drastic contrast to the "wild west" that has evolved around unregulated DeFi projects, which the Government sees as destabilizing.
However, to see this fulfilled, BSN needs to integrate with other prominent blockchains to offer services across the entire ecosystem. This has already happened with many big names such as Ethereum, Hyperledger Fabric, Tezos, ConsenSys Quorum, and Cypherium.
The integration of these blockchains into the BSN stands to be a huge step forward for integrating with other CBDC's in the coming years. By connecting with so many different parts of the decentralized ecosystem, the BSN can make considerable strides in pushing development forward.
How These Partnerships Can Help the BSN and the World
The BSN's overall goal is to give developers access to the tools to develop the next generation of decentralized applications, aka dapps. Furthermore, projects will have the ability to run their nodes leveraging the bandwidth of the BSN, and they can even utilize various resources from any of the other partners. These partnerships range from various blockchain projects to cloud services and technology firms.
For example, in January, BSN partnered with New York-based Ethereum hub ConsenSys to bring their enterprise ledger, Quorum, into the pool of resources available to developers. Quorum is an open-source protocol layer allowing projects to deploy dapps on Ethereum, and access will be open through BSN's public city nodes, located throughout mainland China.
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