Calls for Bitcoin and cryptocurrencies to be reinstated are growing inside China, with the largest English Language newspaper in the region, which is owned by the government's mouthpiece the People's Daily, running an editorial recently saying that regulation is better than saying no to Bitcoin.
The editorial reads:
“The Bitcoin resurrection, following three major corrections that the cryptocurrency has experienced so far this year, reignited debate over a broader adoption of the controversial asset, whose trading has been banned in markets including China.
“There's an increasing belief that just saying no to Bitcoin won't be the eventual solution to the cryptocurrency issue. A more fundamental approach would be to embrace the new technology without putting the country's financial system at stake.”
According to the editorial, the present moves by the Chinese government towards a more innovation-driven economy has sparked speculations that the Communist Party is ready to bring back digital assets trading.
It explained that it makes perfect sense for the government to clamp down on cryptocurrency exchanges at a time when the economy is facing volatility, given the speculative nature of Bitcoin trading which can make people extremely wealthy overnight or completely broke the next day.
Still, it cannot be denied that the blockchain, the underlying technology of cryptocurrencies, has vast innovative power.
The newspaper further stated:
“There shouldn't be a rush to use these applications, and excessively speculative products need to be avoided. But fencing off Bitcoin exchanges can't effectively end Bitcoin trade, and fears of a Bitcoin bubble could leave China behind in the digital currency revolution. Instead, the country should consider rules and regulations that can ensure the technological advance works in the economy's favor.”
The underlying blockchain technology is already being introduced into China. Last month, China’s Ministry of Industry and Information Technology (MIIT) released a white paper highlighting the country’s ambition to adopt blockchain technology in the real economy and even emerged as a top player in the space.
The white paper spelled out Beijing accelerated use of blockchain and the drafting of the first policy on the adoption of the technology on a national level.
Yu Jianing, a co-author of the paper and director of MIIT’s Institute of Industrial Economics, commented:
"Blockchain tech's adoption into the real economy will make cross-industry digital collaboration a reality, which can reduce operating costs and improve efficiency."