Starting from 2019, China has developed multiple blockchain trade finance initiatives. Some of these initiatives have seen tremendous growth for the past few months.
On November 29, Fan Yifei, the deputy governor of the People's Bank of China announced that one of its initiatives has processed volumes of more than RMB 70 billion ($9.8 billion).
Two months ago, the transactions on the China Construction Bank blockchain network crossed the 360 billion renminbi ($50.4 billion) mark. At the same time, the CITIC / Bank of China initiative has processed more than 20 billion renminbi ($2.8 billion) on its forfeiting blockchain. Between just these three projects that amounts to $63 billion in volume.
Meanwhile, part of the most significant global projects in blockchain trade finance are moving slowly, as compared with the Chinese counterparts. Marco Polo, the network with more than 25 global banks, and the Letter of Credit blockchain (formerly Voltron) with eight international banks are waiting to see their first institutions go live in 2020. Both networks are based on R3's Corda.
When Chinese President Xi Jinping announced strong support for blockchain technology in October, experts and blockchain consultants suggested that China would soon overtake the United States in dominating blockchain innovations.
This optimistic statement, however, didn't work well enough to sustain the global blockchain prospect and led to the return of speculative fever surrounding not just major cryptocurrencies but also alleged crypto 'pump-and-dump' schemes.
After rallying as much as 30% within hours of Xi's speech, the price of Bitcoin (BTC) has fallen back to a level even lower than it was before his remarks and dipped to a six-month low below $7,000 on Dec. 2.
Such a downturn was preceded by a series of governmental actions and interference. On Nov. 14, the People's Bank of China's (PBoC) Shanghai Bureau issued a notice to local government agencies in each district in the city to inspect and clear out businesses that offer crypto trading, fundraising, promotion and brokerage services. It later officially published the notice on its website, stating that it plans to nip the growing crypto fever in the bud.
Soon after the notice, this crackdown was proved to be a nationwide effort. On Nov. 28, the Shenzhen Municipal Financial Regulatory Bureau issued a similar notice, vowing to crack down on initial coin offerings and fraudulent schemes that use blockchain as a marketing gimmick without any technological substance.
Meanwhile, trading services of major exchanges by volume such as Huobi, OKEx and Binance, which still serve Chinese investors, have not been affected by the crackdown so far.
That said, there are signs that these trading platforms have taken a step back, at least for the time being, in terms of their operations, marketing and promotional activities.
