Briefing

Bitcoin and Chinese tech stocks surge in wake of Xi’s blockchain endorsement

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China should prioritize blockchain as the core of its innovation and accelerate the development of related technology, President Xi Jinping said in a release by the state-owned Xinhua News Agency. Bitcoin topped US$10,000 on the weekend following Xi’s comments, levelling out to US$9,393 on Monday. An index that tracks 53 blockchain-linked stocks in mainland China rose almost nine per cent on Monday. (Reuters, Wall Street Journal)

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Talking point: This is the Chinese government’s strongest and highest-level endorsement to date of blockchain and related technologies, and it underlines Beijing’s effort to assert the authority of the state over digital currency. Beijing banned cryptocurrency exchanges and initial coin offerings (ICOs) for alternative cryptocurrencies in 2017, citing the inherent riskiness of such investments. In 2018, authorities clamped down further, shutting down WeChat accounts that discussed ICOs, while financial officials in Beijing warned businesses not to host cryptocurrency-related events. The People’s Bank of China has said it’s in the final stages of developing its own centralized digital fiat currency—a token that would be under state control, and a far cry from decentralized technologies like Bitcoin and other alternative cryptocurrencies currently banned in the mainland.