China’s recent announcement of the “Ultra-Large Scale Blockchain Infrastructure Platform for the Belt and Road Initiative” signifies a significant step towards utilizing blockchain technology for seamless cross-border transactions. Led by Conflux Network, this initiative aims to create a public blockchain infrastructure platform to support cross-border cooperation projects along the Belt and Road Initiative. The project is a collaborative effort involving prestigious institutions such as the China Academy of Information and Communications Technology, Shanghai Jiao Tong University, and Fudan University. The goal is to address the unique characteristics of the Belt and Road transnational cooperation scenario and develop a primary platform capable of supporting multi-country deployment.
Conflux Network, a multichain blockchain ecosystem operated by the Conflux Foundation (Shanghai Tree-Graph Blockchain Research Institute), has been instrumental in beta-testing the Hong Kong Dollar-backed stablecoin AxHKD in March. This stablecoin, developed by local fintech company AnchorX, is set to be launched on Conflux Network and Ethereum. Notably, Conflux Network is recognized as the only regulatory-compliant public blockchain in China, highlighting its role in driving blockchain innovation within the country.
Despite China’s strict regulations against cryptocurrencies, including past crackdowns on the industry, Chinese investors are increasingly turning to the crypto market for safety and returns. The country’s economic downturn and sluggish stock market have prompted investors to explore alternative investment opportunities. While crypto trading is banned in mainland China, investors have found creative ways to access cryptocurrencies through centralized platforms like OKX and Binance. Additionally, some investors are leveraging their forex purchase quotas to move funds into cryptocurrency accounts in Hong Kong, taking advantage of the territory’s favorable stance towards digital assets.
As a result of these developments, the Chinese crypto market has experienced a surge in activity, with mainland investors actively participating in crypto trading despite regulatory constraints. This has led to the growth of an underground crypto industry, where investors utilize innovative methods to engage in cryptocurrency transactions. Chinese tech giants like Tencent and Huawei are also making strides in the Web3 space, supporting web3 startups with their computing resources despite the ban on cryptocurrency trading in China.
China’s blockchain initiative and the rise of cryptocurrency trading among Chinese investors highlight the country’s evolving approach to digital assets and blockchain technology. While regulatory challenges persist, the adoption of blockchain technology and the growing interest in cryptocurrencies demonstrate the potential for innovation and investment opportunities in China’s evolving financial landscape.
