shanghai

Jun 17 2021

Shanghai Man: Economist says El Salvador ‘on road to death’, salaries paid in e-CNY …

Our Man in Shanghai has refused to let recent regulations slow down the news coming from China. Enterprise blockchain, central bank digital currencies and start up projects continue to make a positive impact in a region hoping to grow economic value through technology.

Death march for El Salvador

The debate around El Salvador continued this week as media and officials tried to digest the adoption of Bitcoin as a national currency. JPMorgan stated that there was little economic benefit, and John Hopkins University professor Steve Hanke warned that the move could “completely collapse the economy” of the small nation. The former Bank of China deputy governor Wang Yongli took a very hardline approach, by stating that volatility and a lack of regulation or controls would put the economy on a “road to death.” This quote, appearing in state run media The Paper June 9, was an unusually direct and colorful statement on the issue.

Crypto innovation can be productive

Zhou Xiaoquan, a former governor of the People’s Bank of China, had a few positive things to say about cryptocurrency as a technology on June 11. He spoke at an economic summit in Shanghai and noted the cryptocurrency innovation in China can be productive when it serves the real economy. He also took some shots at other countries, stating that people would be mistaken if they thought other countries were taking the same approach towards building financial services. Zhou, who is one of the most often-quoted economists in the country, felt there was little emphasis on the relationship between financial services and economic value elsewhere in the world. Based on the wild displays at the Miami Bitcoin conference a few weeks ago, his position might be more sound than others would care to admit.

Paid in e-CNY

China’s e-CNY tests continued with the first reported mass payment of salaries in Xiong’an, a district near the capital Beijing. According to Cointelegraph, the pilot received support from a number of national banks and saw subcontractors paying workers their salaries from a digital wallet.

Industrial blockchain worth $22.6B

On June 3, a government organization issued a report entitled the China Industrial Blockchain Development Status and Trend Report. According to the report, in 2020, 222 industrial blockchain policies were issued, 12,059 new blockchain-related patent applications were approved, and 776 new blockchain enterprises were established. The report also claimed that the current market size of the industrial blockchain sector was around $22.6 billion U.S. dollars. Industrial blockchain is an area that China is eager to grab control in, leading to this explosive growth in recent years.

Only 5X the fun

Leading exchange Huobi surprised futures traders by limiting them to only 5x leverage on perpetual swaps and blocking new users from accessing the feature altogether. Futures trading, particularly highly-leveraged futures trading, had always been popular features on exchanges like OKEx and Huobi. It will be interesting to see whether these new decisions to limit risk will be damaging to these large exchanges that still somewhat adhere to regulator rules. It’s also possible that it’s a short-term solution in order to avoid scrutiny during periods of tighter control.

Futures of Singapore

While Huobi was tightening controls on futures traders, Singapore-based platform SynFutures was completing a Series A for $14 million. The round was led by Polychain Capital and included names like Framework Capital, Pantera Capital, Bybit, Kronos Research, WOO Ventures, Wintermute, and IOSG Ventures. SynFutures is creating a trustless derivatives market where users can take positions on assets or anything that has an accurate feed, including Bitcoin, the price of gold, or even the Bitcoin hashrate. What many people don’t know is that the SynFutures team is composed of members from Matrixport, a financial service app that was an offshoot of massive Chinese mining conglomerate Bitmain. Now you know the whole story!

This weekly roundup of news from Mainland China, Taiwan, and Hong Kong attempts to curate the industry’s most important news, including influential projects, changes in the regulatory landscape, and enterprise blockchain integrations.

Shanghai Man: Economist says El Salvador \’on road to death\’, salaries paid in e-CNY …

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Jan 26 2021

China’s Biggest Cities, Beijing, Shanghai, Plan to Promote CBDC in 2021

According to the latest announcement, Beijing and Shanghai, which are the biggest cities in China, are planning to hold pilots to promote CBDC (Central Bank Digital Currency) this year.

According to a Global Times report, this effort would lead to a positive start and could pave the way for the digital currency’s official launch.

CBDCs are controlled by the country’s central bank directly, thus helpful in storing value and making digital payments seamlessly. CBDCs can be considered as a digital form of sovereign money that is backed by national credit and government power.

Wider Efforts to Promote the Digital Currency

As a part of this announcement, Beijing Mayor Chen Jining announced that the capital would stimulate the building of demonstration zones for fintech and professional services this year.

Shanghai Mayor Gong Zheng also expressed his views regarding the development of CBDC and stated that the Shanghai city will continue to maintain financial opening-up and encourage the digital currency.

Also, the governor of South China’s Guangdong Province, Ma Xingrui, confirmed that authorities will assist Shenzhen’s development into a pilot zone for the country’s digital currency.

A report also highlights the views of one of the Shenzhen-based veteran industry insiders. According to him, the pilot testing is just an initial innovative step. Once launched, the digital yuan will transform the financial sector and unleash an encouraging digital finance service sector worth billions of yuan.

Chinese Cities Continues to Plan Large-Scale Tests of Digital Currency

CBDC can minimize dependence on banks and other financial institutions and facilitate financial inclusion for the underprivileged population. Since 2020, DCEP’s (Digital Currency Electronic Payment) trial operation has increased from small-scale closed-loop testing to large-scale open testing.

The tests were carried out in various cities of China, including Shenzhen, Shanghai, Suzhou, Chengdu, along with others.

Recently an announcement was made stating that Shenzhen city will stage another public trial of the central bank’s in-the-works digital currency. According to the reports, this is the third time the city will hold one of the “red envelope” giveaways, distributing 20 million digital yuan through a random draw.

Suzhou city also held a similar trial in the month of December 2020, giving out 20 million digital yuan.

To get instant updates about Blockchain Technology and to learn more about online Blockchain Certifications, check out Blockchain Council.

China’s Biggest Cities, Beijing, Shanghai, Plan to Promote CBDC in 2021

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Oct 22 2020

Russian Officials Must Declare Crypto Holdings

In a new move, Russian authorities have announced that officials have to start declaring their crypto holdings. They reversed a 2018 decision that did not require the declaration from officials.

Mandatory disclosure for public officials

Disclosure of crypto holdings will be considered mandatory for Russian public officials started January 1, 2021. The requirement was announced by Igor Krasnov, the Russian prosecutor general held a meeting with 15 fellow prosecutor generals representing the Shanghai Cooperation Organization (SCO). He announced the new requirements on October 20, saying,

“Starting next year, civil servants will be required to declare [virtual] currencies on an equal basis with other assets.”

The Russian labor ministry announced in 2018 that public officials do not need to declare virtual asset holdings in their tax reports. It said that the status of crypto was unregulated, hence it was not to be included in tax reports. However, concerns about cryptocurrencies being used as instruments of bribery and corruption started to rise.

What brings new requirements?

The office of the Prosecutor General claims that it has confiscated over $440 million worth of undisclosed, non-cryptocurrency assets from public officials in the past three years. The new requirements come after President Vladimir Putin signed new laws in July that would classify crypto assets as physical commodities started in 2021. This is the first time that virtual currencies will be recognized in the country. The laws still do not recognize cryptocurrencies as legal tender. However, it would make crypto-activities legal in the country.

SCO member states include Russia, China, India, Kazakhstan, Pakistan, Uzbekistan, and Tajikistan. Non-member partners and observer states like Armenia, Cambodia, Azerbaijan, Mongolia, Iran, Belarus, and Afghanistan were also present during the meeting. As Russia has announced mandatory crypto reporting requirements, it is likely that similar reporting requirements could be enacted in other European nations soon.

The Russian Federal Financial Monitoring Service claimed to have developed a partial de-anonymization system for Bitcoin, Ethereum, and Monero in August. It also said that it is planning to sell the system to overseas countries interested in the system.

Russian Officials Must Declare Crypto Holdings

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Sep 25 2020

Permissionless Blockchain Project, Conflux Network to Act as a Global DeFi Bridge

Conflux Network has formally launched its Tree Graph Research Institute with the government of Shanghai, according to the latest announcement. This launch will experiment with building a regulatory compliance platform that can bridge global Decentralized Finance (DeFi) applications and government regulations.

Fan Long, Conflux Founder, and Tree Graph Research Institute Director, claims that DeFi is a new ecosystem that may present a risk to regulators. Therefore, it is crucial to maintain a reliable communication flow between DeFi innovators and the regulators.

With scalability, stability, and extensibility, Conflux is the next-generation Blockchain-based protocol that is dedicated to implementing Blockchain technology with strategic partners in real-world environments and creating decentralized mass acceptance applications.

Conflux Network Aims to Make Open Communication Crucial

Tree Graph Research Institute aims at experimenting with permissionless DeFi applications to make open communication crucial for continued legislative acceptance.

Fan Long, Founder of Conflux and Director of the Tree Graph Research Institute, mentioned that:

“Regulators need a reliable way to learn what the new technique is about and where it might lead us to. Innovators need a way to understand the concerns and red lines of regulators.”

Conflux is collaborating with the government of Shanghai on many sandbox projects, including the incorporation of Blockchain borrowing and lending services into the Pudong Development Bank of Shanghai, and the utilization of the unique regulatory structure of the Shanghai free trade zone to devise a unique stablecoin for the city.

Permissionless Blockchain Project to Help Developers

A permissionless Blockchain project, endorsed by the Chinese state, aims to provide developers with a robust and affordable framework to build DApps.

In an interview, Fan Long explained that Conflux Network aims to provide a POW network with a faster order of magnitude for transaction rates. The key enabler technique is a novel DAG-based ledger system along with an optimistic concurrency regulation to achieve easier and quicker transactions between all the nodes in the network.

Fan Long believes that DeFi is a new space for regulators, and therefore the decentralized design of Blockchain would complicate the regulation of DeFi products for regulators. However, there are opportunities to implement controls at the boundary between the decentralized and centralized entities.

Conflux’s Open Defi Initiative

In order to bring global DeFi projects and regulations together, the company has introduced the Conflux Open Defi initiative. Through global program tracks such as risk management, new liquidity strategies, and incubation and innovation, the open DeFi initiative aims to connect the DeFi markets of East and West. Few prestigious members of the open DeFi initiative include Blockpower Capital, Antelope Holdings, dForce, Sequoia Capital, DeBank, along with the Chinese state support and others.

To get instant updates about Blockchain Technology and to learn more about online Blockchain Certifications, check out Blockchain Council.

Permissionless Blockchain Project, Conflux Network to Act as a Global DeFi Bridge

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Sep 24 2020

Chinese state-endorsed public chain to act as a global DeFi bridge, says Conflux CEO

Conflux Network, a permissionless blockchain project which is endorsed by the Chinese state, told Cointelegraph on Sept. 22 that the project has officially launched its Tree Graph Research Institute with the Shanghai government.

According to Fan Long, CEO of Conflux, the Tree-Graph Blockchain Research Institute will experiment with local states to build a regulatory compliance platform that can bridge global DeFi applications and government regulations. He added that:

“DeFi is a new world and while it appears as though it may pose a challenge for regulators, they appear willing to listen. At this stage, the most important thing is to maintain a reliable communication channel between two sides— the DeFi innovators and the regulators.”

When it comes to new techniques and innovations, the Chinese government has shown signs of tolerance for experimentation in the past. Fan indicated that the complexity surrounding DeFi and other relevant distributed innovations will make open communication crucial for continued legislative acceptance. He stated that:

“Regulators need a reliable way to learn what the new technique is about and where it might lead us to. Innovators need a way to understand the concerns and red lines of regulators.”

At the moment, Conflux is working with the Shanghai government on several sandbox projects. Fan told Cointelegraph that these projects include integrating blockchain borrowing and lending services into Shanghai’s Pudong Development Bank, and leveraging the Shanghai free trade zone’s unique regulatory framework to devise a unique stablecoin for the region, The CEO explained:

“Shanghai Free Trade Zone is outside of capital control of China where RMB is offshore with its own set of rules, so we are trying to come up with some regulation breakthroughs with experimenting under the free zone framework.”

Compared with the central bank’s digital currency, or CBDC, Fan pointed out that although a CBDC will allow the central government to maintain control of the financial activities, it would be hard for such a centralized form of digital currency to be accepted outside of China.

Conflux is trying to either create a free zone stablecoin or build a public permissionless cross chain for the CBDC.

The project, which began its life as a research project at Tsinghua University, has been working to provide a robust and cheap framework for developers to build decentralized finance applications. Fan explained that:

“Conflux Network seeks to provide a POW network with transaction speeds an order of magnitude faster. The key enabler technique is a novel DAG-based ledger structure together with an optimistic concurrency control to achieve a consistent order of transactions among all the nodes in the network.”

Fan believes that DeFi projects will only be able to go mainstream through willfully enacted compliance measures which evolve alongside government regulations. Blockchain and DeFi are new areas for regulators. Although he cannot speak to how regulators will go about this, his predicts that:

“Decentralization will make it more difficult for regulators to control DeFi products, but there are still possibilities to exercise controls at the boundary between the decentralized world and the centralized world.”

The Shanghai Municipal Government, one of the states endorsing the project, is interested in exploring how the city can leverage blockchain techniques to integrate traditional finance with decentralized financial services, says Fan.

In order to connect global DeFi projects and regulations, the company also created the Conflux Open Defi initiative.

Members include: Sequoia Capital, Blockpower Capital, Antelope Holdings, dForce, DeBank, and MCDEX along with Chinese state support through the Shanghai Science and Technology Committee. Fan says Open DeFi aims to unite Eastern and Western DeFi markets through three globally focused program tracks: risk management, new liquidity strategies, and incubation & innovation.

Chinese state-endorsed public chain to act as a global DeFi bridge, says Conflux CEO

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