Part 12 → A Series on the Future of Cryptocurrency
China’s Center for Information and Industry Development (CCID) has just compiled its most recent list of the most interesting and top ranking cryptocurrency projects. This ranking project began in May and appears to be a consistent attempt for the CCID to keep up with trends. This system raises some interesting questions for those following the global development of cryptocurrency and its leading players. Is China ready to make a major play as it loosens some of its crypto-laws? If so, who stands to win or lose?
The fact that there is an updated rankings list at all is interesting because of the status of cryptocurrency in China.
Until very recently, there has been an outright ban on cryptocurrency across the country.
Some would say that this is due to a fear of the industry and security risks. Others cite deeper political issues and concerns of a global market on domestic finances. On October 26th, the Shenzhen Court of International Arbitration confirmed that it is now legal to own Bitcoin — and other cryptocurrencies — as long as the investments are on Chinese ground. This doesn’t change the outright ban on trading and ICOs, but it is a step in the right direction for a Chinese cryptocurrency market.
These updated rankings place leading figures in questionable positions.
What is more interesting here is the placement of some of the leading figures in the cryptocurrency world. Bitcoin has long held the top spot as the best performing and most trusted option in western markets. Its longevity, security and familiarity mean that it consistently remains ahead of its closest rivals — such as Ethereum and Ripple.
In August, the CCID placed it in 10th place, this month it is in 19th place. The top three right now are EOS, Ethereum and Bitshares. Another interesting factor here is the emphasis on Ripple as the project with the most significant increase in innovation. So what this means is that just as Bitcoin is heralded as a safe, legal option in a court of law, it slides down the ranks and becomes less appealing.Why should we be concerned by this if China isn’t a major player in cryptocurrency right now?
Why does this all matter?
The answer is that it matters because of China’s place in the global financial stage. If they were to lift a ban, allow for trading and encourage new ICOs, this could change the face of the industry. If China were to trade in Ripple and reject Bitcoin in accordance with these rankings, the global rankings and prices could shift considerably. Chinese whales could dominate the market in whole new ways. At the moment, Ethereum is in a bit of a battle for supremacy with the evolving Ripple. This interest from China could nudge their rival ahead.
We also can’t overlook that fact that Chinese activity has already had an influence on the global markets.
A ban on ICOs and trading doesn’t mean a complete lack of activity. There are start-ups that try and get through the gaps — either as scams or legitimate venture. A decline in P2P lending in 2015 hit the industry hard. Now it appears that interest here is on the rise. There are also a number of platforms that have relocated outside of China, but still service Chinese users. Finally, there are some major players in China that have some serious plans for Blockchain tech:
- Bank of China is looking to invest in blockchain technology.
- The Chinese Communist Party is openly talking about the pros and cons of blockchain investments.
- The People’s Bank of China has gone even further, with 68 patent applications within blockchain in 2017 alone.
- They were followed by Alibaba, with 43 patents.
On that note, we should mention the start-up fundraiser for the Alibabacoin. Alibaba is not a big fan of bitcoin, and their company owner is sceptical of cryptocurrency. As a result, they are keen to insist that the new Alibabacoin token has nothing to do with them. They claim that this is nothing more than a scam to deceive the public.
China’s new rankings do matter, and so does any new decision still to come.
It would be naive to think that the cryptocurrency world is run by the few countries that legalize and regulate the market. The majority of ICOs may come from the US, UK and central Europe, but there are traders and influential figures across the world. China may not have the platforms or traders on the same scale, but their actions now could direct the flow of traffic in 2019 and beyond.