While taking a quite rigorous position on cryptocurrencies, the government of China issued a statement of launching a dialogue blockchain infrastructure system jointly with Conflux Network. It is the ultra-large-scale blockchain infrastructure platform for the Belt and road initiative that is the core of this plan. This plan, together with China’s perpetual intensification of the crackdown on cryptocurrency trading and mining businesses brings a paradigm shift in the country’s economy towards blockchain technology, an occurrence for sure not just befitting, but the best strategy for the Belt and Road Initiative as well
Bridging borders with blockchain
The core reason for this one-of-a-kind system is to lay an integrated and effective public blockchain network that will be used to promote cooperation projects between different countries that are members of the Belt and Road initiative. The platform artistically aims to utilize the potential of blockchain technology to enable global collaboration and support open apps that are beyond geographical restrictions. This project serves to depict the Chinese government’s support towards the study and application of blockchain technology alongside other international trade and cooperation endeavors, even though it remains cautious with digital assets.
Cosmos System, an equivalent to multichain that runs mainly over Conflux Network, plays the key role in this cause. With its major cutting-edge Shanghai Tree-Graph Blockchain Study Institute, under the aegis of Conflux Network, the government proves that it is possible to exploit domestically developed blockchain engineering for enhancing strategic objectives application.
This Chinese government’s effort to develop a public blockchain network is happening on the scene of its negative sentiments on cryptocurrencies. Since 2017, the Chinese government has implemented a series of regulations to limit the role of cryptocurrencies within their jurisdiction including the ban of all crypto operations; closure of crypto exchanges, and discontinuation of crypto mining activities. These measures, aimed at financial center stability and risks deriving from the cryptocurrency market’s unregulatedness, demonstrate that the government sees those issues.
These controls, however, were not effective to prevent a considerable part of Chinese investors from carrying on the business and even from looking for new way to circumvent the cryptocurrency ban. Statistics demonstrate numerous Chinese investors possess stablecoins, and traders still deal in desrtiptive expnces through the use of alternative methods. Ultimately, this contradictory state of affairs simply brings to the light the complicated interaction of China‘s regulatory structure and the continuing passion of the people to cryptocurrency.
Tightening the regulatory noose
On the Beijing authorities’ part, the response to the threats deemed by the cryptocurrencies will be majorly through the enactment of amendments touching on about the Anti-Money Laundering (AML) regulations. Since the last time the law was revised in 2007, which was the introduction of cryptocurrency, the jurisdiction is already gearing towards having tighter oversight of emerging digital currency activities. The provision assumes a role of dealing with problems in the field of illegally using virtual assets platforms for money laundering as well as in the sphere of hidden flows of financial resources.
The regulatory shift story was developed after reports suggesting that many virtual currency trading platforms were fake banks running illegal businesses oriented to avoid Chinese foreign exchange sanctions. China’s regulators revised their AML rules to cover virtual tenders so that they can reduce the risks linked to them and work out the potential that the Bitcoin processes might have for economic prosperity across the globe.
Conclusion
China embarked on a new adventure with the creation of the Ultra-Large Blockchain Infrastructure Platform under Conflux Network and that proves the complexity of work on blockchain and cryptocurrencies. Whilst monetary authorities are beginning to implement more harsh rules on digital currencies, the national Chinese government has acknowledged the broad blockchain promises. This project not only assists in strengthening the governance and transparency for the cross-border projects under the One Belt One Road Initiative but also resides in the blockchain space as one of China’s blockchain centers.
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