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China Loosens Grip on Blockchain, Debuts a Pilot Program

Chinese wants the country to test out the 'innovative application' of the blockchain technology that underpins cryptocurrencies.
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China may be coming full circle following its ban of cryptocurrencies in 2021 as the country is allowing some cities and entities to try out blockchain applications. 

China designated its capital of Beijing, its largest city of Shanghai and Guangzhou in the southern part of the nation as part of pilot projects designed to "carry out the innovative application of blockchain" technology. 

Officials issued a notice announcing the list of 15 "comprehensive blockchain innovation application pilots." Local government departments, universities, banks, hospitals car companies and power companies are among the 164 entities chosen to carry out trial blockchain applications. 

"The notice emphasizes the need to focus on collaborative advancement. Provincial network information offices and supervisory departments in all regions should focus on promoting the pilot construction work together, and give full play to the role of blockchain in promoting data sharing, optimizing business process, reducing operating costs, improving collaboration efficiency, and building a credible system," the Central Cybers[ace Administration said. 

China Softens Crypto Stance in 2022

In early January, China's central bank issued pilot versions of its wallet application for the digital yuan as the country steps up efforts to develop its official digital currency. 

The app is still in a development period and can be accessed only by certain users through institutions that offer digital yuan services, including major Chinese banks, Reuters reports.

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Like the new softer blockchain rules, the wallet is available only in certain pilot areas that include Beijing and Shanghai. China has been working on a digital version of its currency for eight years. 

 Crypto Bans in China and Across the Globe

In June 2021, Chinese officials renewed a crackdown on the cryptocurrency industry, with authorities in China's Sichuan province, once one of the country's biggest mining centers, ordering crypto miners to shut down operations. 

The People's Bank of China then said it spoke to Alipay, the payments service from Alibaba's Ant Group, and other major financial institutions, urging them not to provide services related to crypto activities including account openings or clearing and settlement. 

The move followed a ban on local crypto exchanges in the country in 2017. 

Earlier this month, the Bank of Russia, the country's central bank, said that cryptocurrencies should be banned

In a report, the institution indicates that cryptocurrencies are volatile and widely used in illegal activities such as fraud.

Russia joined Egypt and nearly 50 other countries with either outright bans on crypto or severe restrictions.