The number of Chinese companies and provinces that have adopted blockchain technology continues to grow, despite government restrictions on cryptocurrencies.
China expanded its restrictions on the cryptocurrency industry in 2021. While individuals can still hold cryptocurrencies in the country, businesses, banks, and financial institutions are prohibited from offering any type of cryptocurrency-related trading, dealing, and investment services, as well as conducting crypto mining activities.
The latest restrictions imposed by the Chinese government were implemented in May 2021 as part of a package of measures designed to address the legal and environmental challenges of the crypto industry. This package of measures was added to the declaration of illegality that the Chinese government established on ICOs (Initial Coin Offering) in 2017 and the ban on cryptocurrency exchanges and trading platforms in the country.
However, despite all the restrictions noted above, the adoption of blockchain technology, the underlying technology of Bitcoin and cryptocurrencies, continues to grow.
At present, 1.400 companies related to blockchain technology operate in the Asian nation. In addition to this, 29 Chinese provinces and cities have added blockchain to its growth, development and innovation strategies, said the China Academy of Information and Communications Technology (CAICT) in its report titled “Blockchain Whitepaper 2022.”
China dominates 20% of the global blockchain industry
According to CAICT, the number of blockchain startups created in China has declined over the past year. However, the cumulative total of companies operating with this technology within the country marked a new milestone in 2022, reaching 1.400 blockchain companies.
Globally, the Chinese research academy notes that there are about 6.914 blockchain companies, so China dominates approximately 20,2% of this market, actually.
Source: CAICT
In the chart above, the orange and blue bars indicate the number of blockchain startups created globally and in China, respectively, while the blue and yellow lines indicate the total number of blockchain startups accumulated globally and in China, respectively.
In its report, CAICT notes that new blockchain-related technologies such as NFT tokens, Web3 and the digital yuan are driving more businesses and companies in the country to explore the potential and innovation of blockchain.
Chinese provinces and cities embrace blockchain
29 of China's 125 provinces and cities have already integrated blockchain technology into their growth plans and strategies.
According to CAICT, these provinces and cities have issued a total of 319 industrial policies related to blockchain technology To date, these policies are aimed at experimenting with the applications of technology and exploring its different use cases within areas such as finance, government data management, logistics, health, agriculture, education, among others.
For example, blockchain policies implemented from Beijing are mainly focused on exploring blockchain applications in government data management and the security and efficiency of cross-border transactions. Shanghai is focused on making use of blockchain technology to Driving decentralization through NFTs and Web3, as well as exploring medical applications and green development. Other provinces, such as Henan, Sichuan and Yunnan, are more interested in developing blockchain infrastructure, while Guangdong, Guizhou and Shandong are more interested in exploring the potential of blockchain in financial applications.
Blockchain Services Network (BSN)
China is the second leading country in blockchain technology adoption after the United States, CAICT noted.
Despite the restrictions on cryptocurrency trading and mining, the country remains attractive for the development and innovation of this growing industry. Giants such as Tencent, Baidu, Huawei and JDcom are some of the largest Chinese corporations in the world that are experimenting with different blockchain-based solutions.
The country is even developing its own blockchain-based service platform, BSN, and has created an official marketplace for NFTs, called China Digital Asset Trading Platform, which was launched earlier this month.
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