China Taking A Big Leap With Blockchain

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China Pushing Itself Towards Blockchain Technology

President of China, Xi Jinping recently emphasised on the potential blockchain as a smart city technology. Describing it as an “important breakthrough” he urged China to grab the opportunity offered by blockchain to boost the country’s development. 

The statements from the Chinese President were taken by surprise. Because the nation has effectively banned Bitcoin and other cryptocurrencies from the mainstream media, his recent speech came as a catalyst to the Chinese government’s commitment to promoting the underlying blockchain technology. 

Reports show that China will be spending $2 billion on miscellaneous blockchain projects in the coming years. With Blockchain technology, it is stepping forward to design a digital space that connects the entire country. 

China’s blockchain initiatives are reportedly focused on the financial sector. Following in the line are the areas including retail, manufacturing, process manufacturing and professional services. 

Go on and explore how the country is driving change with Blockchain! 

China To Become The First Country To Have Its Own Digital Currency

Liberstad, in Norway, became the first smart city to have a cryptocurrency as its official currency. And now, China is set to become the first country, in the line. The nation will have its own state-backed digital currency by next year in 2020. The exact launch date is not revealed though. Digital Currency Research Institute (DCRI) is commissioned to develop and manage the digital currency. The organisation has already started hiring tech experts to accomplish the task. 

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The central bank of China has released a few details of its Digital Currency Electronic Payment (DCEP). Exploring the possibilities of introducing such a digital currency began in 2014. But, the ban on bitcoin exchange and other cryptocurrency platforms hindered the progress.  

DCEP is observed as financial innovation. The initiative indicates a significant shift in the country towards a Blockchain ecosystem. China’s new digital currency resembles Facebook’s proposed digital currency Libra. It also has similarities with the existing cryptocurrencies like Bitcoin. One such similarity is that the Chinese currency will be stored in a digital wallet.

What differs from other counterparts is that the central bank of China will have the capacity to keep track of the movement of money. At the same time, it will also be able to supervise trading. Reports show that the project is the government’s effort to protect the economy when possibilities are arising that newer payment systems could authorise illegal money flows. 

In addition, China has legislated a new law. It intends to facilitate the development of cryptography business while ensuring the security of cyberspace. The new is expected to come into effect after the launch of China’s new digital currency, in the next year.

Blockchain Service Network (BSN) – A Push For The Evolution 

Blockchain Service Network - Initiative by China

To ease the penetration of blockchain applications from the technical and economic perspective, China is now testing a nationwide BSN. According to reports, the initiative is anticipated to encourage the development of blockchain-related industries and businesses. Comprehensively, the move is a part of the goal to support the growth of smart cities and the digital economy. 

State Information Center (SIC) and six institutions such as China Mobile and China UnionPay have come together to launch the new blockchain infrastructure network. SIC is in charge of supervising the planning of the nationwide public infrastructure network. Whereas China Mobile and China UnionPay are tasked to provide the important blockchain technology support, network and data resources.

Li Huidi, vice president of China Mobile believes that BSN will replace the high-cost network infrastructure of syndicate blockchains. It will serve as a convenient, premium quality and cost-effective tool for developers designing blockchain applications. 

Once the network goes operational, governments, organisation, tech corporations and other businesses will be able to connect on a single platform. It will enable everyone in to share data and resources seamlessly and securely, as per reports. 

Currently, the project is under the beta testing phase across a number of smart cities in China. 50 public nodes are being deployed across 31 cities in the country by BSN. Resources available on the network will remain free of charge until March 2020.

Blockchain For Smart City ID System 

To improve interoperability between infrastructure, data and cities, China has deployed a blockchain-based smart identification system. Chinese Urban Development Research Association, the Chinese Academy of Social Sciences, Zhongguancun Industry & Information Research Institute of Two-dimensional Code Technology (ZIIOT) and the Global Urban Smart Engineering Technology Research Centre have together deployed what is known as the City IDcode Identification System (CIDIS). 

CIDIS was launched at the 2019 China Urban Innovation and Development Forum and 36th Annual Meeting of China Research Society of Urban Development in Shijiazhuang. The new system operates using blockchain technology and is backed up by unified issuing rules, distributed storage analysis and tamper-proof security. 

As per the organisation, until now the coding systems have not been uniform. Data and applications are unable to interoperate between different departments and industries. This is one of the major reasons which limits smart cities from operating initiatives effectively. 

CIDIS will overcome this challenge and support interconnectivity and data-sharing between systems and cities. It is the first top-notch MA node code in China and is developed in line with the ISO/IEC 1549 international standards.

Each city, department and a specific infrastructure component will have its own unique global ID code. For example, Shijiazhuang has been assigned as city code MA.156.1301. The city’s urban management bureau’s ID code is MA.156.1301.01. And the traffic management department in the city has been assigned a city code MA.156.1301.02. 

Going further, the China Research Society of Urban Development, the Global Urban Smart Engineering Technology Research Centre Beijing and ZIIOT will collaboratively establish an agency that issues unique city code. Additionally, it will also create a smart code issuing management service platform and support the adoption of the city code.

China Enters Blockchain-smart “Innova City” 

After, over a dozen initiatives in China’s pipeline, the country is now moving to have a blockchain city. Wanxiang, the Chinese car manufacturing giant recently announced a partnership with a blockchain startup PlatON to create the new smart city. Dubbed as Wanxiang City or “Innova City.”, the city will be located in the Zhejiang province in China. 

As per the sources, Waxiang has committed to invest $29 million into developing the smart city. PlatON, through its expertise, will create an underlying blockchain infrastructure capable of tracking data efficiently. It will be provided with specific features that will improve the transportation sector. The tracking platform is also expected to optimise green waste management and other operations in the blockchain city. 

Blockchain technology is seen as a potential driver of innovation in futuristic cities by several experts. Blockchain-based cities will not just be smart and highly functional. But it will also open doors to intelligent interconnectivity between city departments, citizens and government. The synchronism brought by blockchain technology will attract an enormous level of efficiency – which currently does not exist in any smart city around the world. 

Considering the qualities, a blockchain foundation in a smart city will improve synergy between every technological element of a city. Sharing of information and making updates will happen seamlessly and securely.