China’s Commercial Banks Should Embrace Blockchain Technology, Says Central Bank Official

Li Wei, the head of the People’s Bank of China technology department, has urged commercial bank in the country to embrace blockchain technology and digital finance.

According to Reuters, Wei’s words came during a forum in Shanghai, where he said commercial banks should “step up their application of blockchain technology.” His comments came shortly after China’s president, Xi Jinping, said the country should “seize the opportunity” afforded by the technology.

As reported, Xi said blockchain should be taken as an “important breakthrough for independent innovation of core technologies.” The country’s leader noted China needed to “focus on an umber of key core technologies” to accelerate its development.

It’s worth noting President Xi’s remarks, just like Li Wei’s note for commercial banks, focus on blockchain technology and not decentralized cryptocurrencies like Bitcoin, which China has historically looked down on.

The comments initially didn’t seem to affect Bitcoin’s price, as charts show only a small bump in the cryptocurrency’s value after President Xi’s remarks. A few hours later, however, the cryptocurrency started surging. Dovey Wan, a Founding Partner of Primitive Ventures, noted this may have been due to an overreaction from traders in the West.

BTC’s surge also coincided with the expiry of futures contracts on CME, and with the CEO of Crypto Capital being arrested by Polish authorities on accusations on money laundering. It helped daily trading volumes on Bakkt hit a new record.

Cryptocurrency exchanges have been banned n China since September of 2017, and in 2014 the People’s Bank of China ordered commercial banks and payments companies to close bitcoin trading accounts. President Xi’s remarks seem to have been on the “blockchain, not bitcoin” side.

Featured image by zhang kaiyv on Unsplash.