Blockchain milestone paves way for state-backed digital currency
Published: Dec 30, 2019 11:06 PM

People walk by a sign of Blockchain Summit during the Mobile World Congress Shanghai 2019 in June. Photo: IC

I can still recall the date, October 25, 2019, a milestone in China's blockchain industry.

That day I was off duty, out of town enjoying a nice vacation with my friends. Breaking the peace was a phone call from my colleague. She told me that Chinese leaders had made comments to encourage the nation to "seize the opportunity" in the use of blockchain technology. 

Her voice was loud, thrilled and full of excitement. As a former bitcoin investor, I also responded with the same kind of energy. But shortly after hanging up the phone, my feelings began to turn mixed as the comment from the leader of the world's second-largest economy had a sweeping impact on the trading of various cryptocurrencies. 

The price of bitcoin alone shot up more than 30 percent overnight. 

Whoops, I said to myself then, it seems that I withdrew from the market too early and missed the goose that lays the golden eggs.

My regretful night marked a watershed for China's blockchain industry, which has risen from obscurity to one of the nation's hottest and most cutting-edge technologies. During the past two months, I received at least one media invitation every week for blockchain-related discussions. The technology has become so prevalent and penetrating that our media organization also invited industry experts to organize seminars on related topics.

During my recent trip to Shenzhen, South China's Guangdong Province, entrepreneurs there were very outspoken on the applications of the technology in sectors such as financing, government affairs, supply chain and even genetic data analysis. Several months ago, they were reluctant to discuss such topics. 

While the blockchain circle is celebrating a carnival, what was particularly intriguing during my Shenzhen visit was how those industry insiders were straining their ears, not daring to miss any hearsay concerning digital currencies, whose backbone is formed by the digital ledger blockchain technology. 

The year of 2019 marked a rosy year for China's research into its state-backed digital currency project called Digital Currency Electronic Payment (DC/EP). The roadmap was disclosed by Chinese officials for the first time, and progress was made public regularly. 

I was also informed by sources that a number of high-tech companies such as Tencent and Alibaba as well as state-owned banks are participating in the DC/EP project. 

At this point when Facebook is promoting Libra and the European Central Bank ambitiously talks about issuing its own digital currency, a global battle on preserving sovereign currencies' positions is already on. 

It seems like China's digital currency is imminent. Could 2020 be the year that China's central bank issues its digital currency? 

I don't know. But I'm sure about one thing: The clock is ticking and as competition heats up, Beijing does not want to see other digital currencies growing into dominant currencies that weaken the yuan's position. 

At least, the nation's head start in blockchain-powered technology will help it gain an early edge in the field.