China's Shenzen Zone Opens Doors to Digital Currency Research

John Moore
  • New policy on development of Shenzen Economic Zone welcomes research in "Digital currency and payments" 
  • China has been working on its own digital currency for five years, while more recently banning trading and listing of cryptocurrencies
  • Long-term plan for Shenzen continues its role as a bridge between Hong Kong and Chinese mainland, hopes it will serve as an example of Chinese economic reform and innovation

In a move that perfectly encapsulates the Chinese authorities’ somewhat conflicted relationship with digital assets, it’s been revealed that the Shenzhen Special Economic Zone will look to open its doors to crypto companies and aid their research. 

The ‘One Country, Two Systems’ concept that will drive the zone’s mission to serve as an example of progressive Chinese economic reform - which Google Translate somewhat artfully Anglicises as “socialism with Chinese characteristics” - seems to extend well beyond the project and into the State’s handling of crypto in general.

To wit, the country forbids any and all trading of Bitcoin or similar digital assets by its citizens, whilst simultaneously seeking to develop and launch its own. The central bank issued digital currency, colloquially known as the ‘Digital Yuan’, has apparently been in development under the auspices of the People’s Bank of China for some five years project, but could well be a wolf in crypto’s clothing

The Shenzen zone has been featured in the news recently due to its proximity to the ongoing social unrest in Hong Kong, and has long acted as a buffer between the Chinese mainland and the more liberal principality.

Now that role is apparently being codified in a way that allows political and economic reforms there to serve as an example of the State’s vision for modern China, and bridging the gap between socialist ideology and the Western business practicies. The South China Morning Post also posits that the new policy could serve to reduce Hong Kong's influence and stature in the region.

Nevertheless, part of the plan will allow for Shenzen to “vigorously develop strategic emerging industries”, including support for “innovative applications such as digital currency research and mobile payment”, as a way of promoting interoperability with Hong Kong and Macao’s financial markets. In the light of the State’s broader policies, which seek to promote the incumbent financial system by outlawing options such as Bitcoin, it is unclear exactly what form this research will be allowed to take. 

Bitcoin has regularly been cast as a safe haven for those looking to secure their assets during the recent problems in Hong Kong, with a noted premium being seen in the BTC price on sites like Local Bitcoins

History Indicates Bitcoin Will Reach $20,000 in 2020: Bloomberg Report

Michael LaVere
  • Bloomberg's June 2020 Crypto Outlook report predicts bitcoin reaching the previous all-time high of $20,000 in 2020. 
  • The report claims bitcoin is consolidating for a bull run and gaining an advantage over the rest of the crypto market. 

A new Bloomberg report claims that bitcoin will approach its record all-time high of $20,000 amidst the fallout from COVID-19 and other market accelerators. 

According to Bloomberg’s June 2020 Crypto Outlook report, bitcoin has been gaining support around the $10,000 price point since the halving. Senior commodity strategist Mike McGlone writes that something would have to go “really wrong” for BTC not to continue appreciating throughout the remainder of the year.  

The report reads, 

The same forces buoying gold support bitcoin, yet the supply of the crypto is more constrained. Adoption, by default, is the primary Bitcoin metric, and our indicators remain positive.

Bloomberg claims that bitcoin is consolidating for a bull run and has gained an advantage over the broader crypto market. The report highlights bitcoin’s limited supply relative to most altcoins, which investors will find increasingly attractive in light of central-bank monetary easing measures. 

The report also predicts that bitcoin will return to its all-time high of $20,000 by the end of the year, with the crypto-asset mirroring chart features seen during the last block reward halving in 2016. 

In addition to bitcoin, Bloomberg claims that the COVID-19 pandemic has been a potential accelerator for Facebook’s libra and a potential Fed-backed digital currency. The report argues the recent outbreak has highlighted “vulnerabilities” in the world’s cash-based system built on outdated technology and could give new life to Facebook’s libra project. 

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