China Now Downplaying Blockchain Could Be Social Construct to Build It Up

China is building toward being a nation that separates the decentralized cryptocurrencies from the underlying blockchain.

In the latest calls from regulators, the bullishness on blockchain has come under some scrutiny as banking regulators have said that it would be dangerous to mythologize blockchain technology.

Their subsequent change in attitude to blockchain, with the president, Xi Jinping praising blockchain on March 30 - and news that they are developing their own national digital currency, suggested by a patent filed for a digital wallet on June 26 - makes one question China's real feelings toward Bitcoin.

Still, there is the downplaying of the potential of the blockchain, especially in a tech-orientated country like China.

Fan Wenzhong, the head of the international department of the China Banking and Insurance Regulatory Commission, has warned against "Mythologizing" blockchain technology, adding that it is hard to call it a revolution.

Herein lies the crux of the central bank's relationship with blockchain technology as it stands in China at the moment.

He goes on to mention that the banking system in China might also be fearful of blockchain technology making them obsolete, so instead of letting the whole thing run wild, the central bank would rather build it up slowly and have it be based on their controls.

"It's the issue all over the world, because blockchain has the potential to destroy the whole banking system. It conflicts with the existing system. And specifically in China, I think the problem right now is the potential for it all to [become a] bubble, so the government officials want to develop it steadily. But the point is they are not banning blockchain, they are encouraging it."

"There's always the idea that 'Oh, blockchain and cryptocurrency are going to remove intermediaries, are going to change the world, etc.' But we know that we are still eons away from that utopian world. But in China, many projects are still money-making schemes. These projects are sprouting all over China, trying to ride on the blockchain wave. But nothing substantial comes out of these projects."

"The Chinese government is trying to tone it down. In late 2017 and early January, the words Bitcoin and Ethereum were a taboo in Chinese society. You didn't see people talking about it on the street or on social media. Blockchain is the 'appropriate' word to use even now."