Crypto is Illegal Ponzi: Says China’s President Xi Jinping
China’s President Xi Jinping has poured cold water on reports of growing crypto adoption in China by calling virtual currencies vehicles for criminal behavior. Jinping’s comments offer another example that Beijing’s growing blockchain utility will not extend towards public crypto projects.
Meanwhile, there are reports that the country’s military is looking to incorporate blockchain technology into its operation. This unique blockchain adoption case may even include a tokenized rewards system for its personnel.
Crypto is Illegal, Says Chinese TV Program
Dovey Wan — founding partner of Primitive Ventures and trusted Chinese crypto news source published a tweet on Monday (November 18, 2019), showing a high-profile TV program in the country calling crypto a scam.
The TV program produced by CCTV1, an official channel of the Chinese Communist Party (CCP) included comments from President Xi. According to the program, cryptos are unregistered securities and they constitute financial fraud, as well as, illegal Ponzi.
President Xi even offered ominous statements about the future of cryptos in China, declaring:
“Even though these [cryptos] seem to be lively and vibrant today, tomorrow they may all be on the list [of crimes].”
Since 2017, authorities in Beijing have gone on a campaign of criminalizing several aspects of the crypto market, beginning with trading and initial coin offerings (ICOs). As previously reported by Blockonomi, crypto mining has only recently been classified as not being a banned activity.
Blockchain, Not Crypto
According to Wan, the narrator lambasted the current state of the crypto scene remarking that” blockchain is not an ATM.” Several crypto critics have in the past spoken against the get-rich-quick nature of the industry that pervades both the entrepreneurial and trading ends of the crypto spectrum.
The statement also likely reveals another undertone to China’s apparent blockchain adoption — one that does not include cryptos. Beijing’s crypto crackdown hasn’t extended to blockchain technology with several state actors even calling for more robust blockchain utilization.
Critics even state that China’s blockchain adoption is only part of the government’s attempt to gain greater control over its citizens. Earlier in November, Ethereum co-founder Joseph Lubin remarked that China’s interest in the technology will not include the utilization of the decentralized aspects of blockchain.
Despite calling crypto a criminal activity, President Xi waxed lyrical about blockchain back in October 2019, declaring that it will be a “core technology” in China.
China Won’t Embrace Public Cryptos
Some commentators say the rhetoric expressed in the TV program points to the long-held belief that Beijing will not embrace public cryptos like bitcoin (BTC). The country central bank — the People’s Bank of China (PBoC) is reportedly working on modalities for a digital RMB.
Given the country’s tendency to adopt strict digital censorship, it is highly unlikely that Beijing will allow other cryptos to continue operating in China after the launch of a digital RMB. Some commentators say the current state of affairs is part of the preparatory process for the launch of China’s digital currency.
Meanwhile, in the West, several stakeholders are urging their respective central banks to look towards creating their own sovereign cryptos to prevent China from pulling too far ahead in the race for control of the emerging digital economy.
PLA Looking to Adopt Blockchain Technology
While cryptos might be seen as illegal by Chinese state media, the country’s military is looking to adopt blockchain technology. The People’s Liberation Army (PLA) published an op-ed mulling the idea of incorporating blockchain into its activities.
The PLA is also considering creating a rewards system for soldiers using cryptocurrencies. If implemented, it may replace the current system being used presently that only caters to long-term service personnel.
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