Despite the unhappy breakup between China and cryptocurrencies last year, President Xi Jinping is now calling the founding blockchain technology a ‘breakthrough.’
For the Chinese authorities, Bitcoin and other cryptocurrencies could create financial risk and potentially jeopardise Communist Party authority. Yet the blockchain technology, that cryptocurrencies are built on, could provide the PRC with greater governmental control.
At the surface, this appears contradictory – those who are distrustful of government authority are among those who are typically drawn to blockchain, as a result of the anonymity the technology offers. Yet if the Communist Party restricts those who enter transactions, blockchain can offer the government even greater oversight.
Upon its arrival in China, Chinese exchanges accounted for 95% of official global bitcoin trading, until early 2017 when this figure fell to 20%.