About three weeks ago, the Chinese government began a series of positive overtures to the blockchain industry. This started with President Xi Jinping dubbing the technology an innovative concept that could help the country enhance its economy even more.
However, quite notable is the fact that while Beijing seems to have fallen head over heels for blockchain, its relationship with cryptocurrencies hasn’t improved. Crypto assets are still banned in the country, and while there was a little bit of hope that the governments’ newfound love for blockchain would spill over to the currency that the technology powers, there is minimal evidence of that happening.
Crypto currencies have lost over $10 billion in value in the last 24 hours.
China said its for laundering money.
The U.S. government wants crypto exchanges to disclose crypto user identities.
— Steve Burns (@SJosephBurns) November 19, 2019
Painting Cryptocurrencies as Ponzi schemes
Earlier this week, Focus Report, a news show that runs on Chinese state-run TV channel CCTV-1, aired a segment where cryptocurrencies were taken to the woodshed. The episode, which was dubbed “Blockchain is not an ATM machine,” pointed to several instances where cryptocurrencies have been used to scam unsuspecting investors, to seemingly prove that there isn’t much inherent value in the currencies.
Cryptocurrencies were summarily called “illegal Ponzi” schemes and “financial fraud,” with other names used to describe them being “pyramid schemes,” “air coins,” and “money-grabbing schemes.”
On the segment, Wu Zhen, the head of the State Internet Emergency Center’s Key Laboratory of Internet Financial Security Technology, warned users to be wary of “zero-return coins,” which are bought at high prices, only to see their values drop significantly and never live up to their billing. The show also claimed that cryptocurrencies are overly deceptive, as they confuse blockchain with financial literacy and use this misnomer to fool ordinary people.
Chinese Propaganda Strikes Again?
The implications of this aren’t so difficult to see. The Chinese government has been confirmed to be working on its own digital asset, and many are of the opinion that the need to adopt blockchain was the reason why they began to endorse the technology in the first place. Now that the plans for a state digital asset have been out there, it is possible that the regime wants to pull out all the stops to ensure that people stay as far away from Bitcoin as possible.
China’s push for Blockchain has helped it surge ahead in tech
There are thousands of companies in China that are involved in Blockchain
India needs to catch up with China else we risk losing an important tech sector
— Nischal (WazirX) ⚡️ (@NischalShetty) November 19, 2019
The Chinese government is known for relying heavily on news outlets to spread its views, with media houses such as XinhuaNet and CCTV churning out government propaganda via program after program on their platforms. Like all other propaganda news media, there is most likely no pee of news or information that gets are on these platforms that doesn’t get vetted and approved by the Communist Party.
With all of this, it wouldn’t be too far-fetched to believe that the government is actively trying to build the anticipation for its digital asset by killing the market for the other ones.
The only problem would be how the government plans to sell its own currency after thrashing the other ones. The term “cryptocurrencies” isn’t generic, so seeing how propaganda news outlets will want to spin the “ChinaCoin” as something that will be good for the public will be rather interesting.