Bitcoin Escalates On China’s Blockchain Endorsement

The Chinese state media advised people to stay levelheaded following a price escalation of bitcoin and blockchain stocks triggered by Chinese President Xi Jinping’s support, Reuters reported on Tuesday (Oct. 29).

“Blockchain’s future is here, but we must remain rational,” he said, according to state-run news outlet the People’s Daily. “The rise of blockchain technology was accompanied by that of cryptocurrencies, but innovation in blockchain technology does not mean we should speculate in virtual currencies.”

When Xi said last week that China should accelerate the development of blockchain technology, it was the first time Beijing publicly supported digital currency.

The Shanghai Stock Exchange said Monday (Oct. 28) that regarding “blockchain-related (topics), we ask listed companies to make statements based on facts and not make any exaggerated claims or create vicious hype,” traders from three Chinese brokerages told Reuters.

Two years ago, Chinese regulators banned cryptocurrency and trading exchanges. In 2019, Beijing announced it was working to launch a central bank-issued coin as a way to reduce the expense of paper money and increase control of the money supply.

The People’s Bank of China (PBoC) last month said it was looking toward new technologies to keep a closer eye on the nation’s FinTech, blockchain and digital lending markets.

PBoC became one of the first central regulatory institutions to ban initial coin offerings, while also imposing a strict ban on bitcoin and trying to weed out bitcoin mining companies in the country. It has also been unfriendly toward other forms of digital finance, including the peer-to-peer lending industry.

Yet onlookers have noted that PBoC has been working diligently toward its own FinTech growth. It announced in August that it is ramping up the development of its own cryptocurrency. In a video conference to discuss its priorities for the second half of 2019, the bank revealed cryptocurrencies will be closely monitored, suggesting that it should accelerate the research and development of its digital currency.