Blockchain with Chinese characteristics: China launches 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 US continues to crack down on the industry.

On Wednesday, the government of the most populous nation on the planet announced it would launch a national Blockchain Technology Innovation Center in the capital, Beijing.

According to a report by 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 maintaining a ban on cryptocurrencies.

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

In addition, the new center will focus on advancing large-scale use cases that deal with the national economy and the livelihoods of Chinese citizens, and help establish blockchain as the foundation of China’s digital infrastructure. Discoveries made through the research will be used to expand China’s blockchain industry and promote the digitization of Chinese society, the report said.

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

On February 1, the team at BABEC revealed the development of the “Hive” data cluster based on the 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 used for a large number of important industries and key areas of the national economy, according to the report, including national tax services, trusted digital identity systems, public services and supply chain finance. The project has established a set-up of nodes in 15 major countries on four continents and is helping to strengthen the competitiveness of Chinese companies on the global stage.

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

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

And according to the Blockchain Whitepaper published by the 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 2021-2025 five-year plan.

China is also leading the world in the development of a central bank digital currency (CBDC), with its digital yuan pilot already established in 17 provinces, which include 26 major 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 further testing and exploration of possible applications of a digital RMB across 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 cost increase for customers.

During the recent Spring Festival celebrating the Lunar New Year, nearly 200 digital yuan-related activities were launched across the country that generated more than 180 million ($26.6 million) e-CNY distributed to citizens in various forms, including subsidies, consumption coupons and other programs.