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Blockchain with Chinese characteristics: China to launch a new research center in Beijing

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(Kitco News) - The crypto ecosystem has officially entered the Twilight Zone as China has become one of the more welcoming jurisdictions for blockchain technology while the U.S. continues its crackdown on the industry.

On Wednesday, the government of the most populous nation on the planet announced that it would be launching a National Blockchain Technology Innovation Center in the capital city of Beijing.

According to a report from China Daily, the Chinese government established the research center as a way for the country to experiment and develop technological breakthroughs related to blockchain while simultaneously maintaining a ban on cryptocurrencies.

The center, which was approved by the Ministry of Science and Technology, will create a research network with local universities, think tanks and blockchain businesses to explore core blockchain technologies. The center will focus on areas of blockchain related to fundamental theory, software and hardware, with the goal of developing useful technologies and industrial applications.

Additionally, the new center will focus on advancing major use cases dealing with the national economy and the livelihoods of Chinese citizens, helping to establish blockchain as the foundation for China’s digital infrastructure. Discoveries made through the research will be used to expand China’s blockchain industry and advance the digitalization of Chinese society, the report said.

The Beijing Academy of Blockchain and Edge Computing (BABEC) – which is most well-known for developing Chang’an Chain or ChainMaker blockchain – has been tasked with running the new institution. ChainMaker is backed by a consortium of Chinese businesses, most of which are state-owned, including China Construction Bank or China Unicom.

On Feb. 1, the team at BABEC revealed the development of the “Hive” computer cluster based on Chang’an Chain, which enables the homegrown blockchain network to process more than 240 million transactions per second (TPS).

Chang’an Chain has already been applied to a large number of important industries and key areas of the national economy, according to the report, including national tax services, credible digital identity systems, government services, and supply chain finance. The project has established a layout of nodes in 15 major countries on four continents and is helping to enhance the competitiveness of Chinese companies on the global stage.

The launch of the innovation center is part of China’s push to develop “blockchain with Chinese characteristics,” as the nation looks to advance and integrate blockchain technology without the cryptocurrency aspect that is viewed as a threat to the country’s financial ecosystem.

In January, the government of Beijing launched the 2.0 version of its data directory based on Chang’an Chain, an application that collects information from over 80 government departments and 16 economic development zones in Beijing and stores it on-chain.

And according to the Blockchain Whitepaper published by China Academy of Information and Communications Technology (CAICT) in December 2022, the country has more than 1,400 blockchain-related companies and at least 29 cities and provinces have included blockchain as part of their five-year plan for 2021-2025.

Former PBoC official calls on China to reevaluate its ban on crypto

China is also leading the globe when it comes to the development of a central bank digital currency (CBDC), with its pilot for a digital yuan already established in 17 provinces, which includes 26 large cities and 5.6 million merchants. The People’s Bank of China (PBoC) released an update on the project in January indicating that the bank plans to continue expanding the pilot program to allow for additional testing and exploration of the possible applications of a digital RMB throughout the country.

Ultimately, the central bank wants to develop a system where users can “scan with one code” and merchants can support as many types of transactions as possible while minimizing the increase in costs to customers.

During the recent Spring Festival which celebrated the Lunar New Year, there were almost 200 digital yuan-related activities launched across the country that saw more than 180 million ($26.6 million) e-CNY passed out to citizens in various forms, including subsidies, consumption coupons and other programs.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.