President Xi: China to take the leading position in the emerging field of blockchain

The Central Politburo of the Communist Party of China, led by President Xi Jinping, held a study session on the blockchain technology development on the afternoon of October 24. Xi emphasized that the technology is an important breakthrough and urged the country to invest in and accelerate its development.

Why it matters:

• The Central Politburo is a group of 25 highest officials of the Communist Party. Historically it has been very effective at using a top-down approach to drive the adoption of emerging technologies. One recent example is deep learning, where China has arguably surpassed the US by some standards.
• Classically, the official announcement by the state-owned media is full of buzzwords such as "IoT" and "digital assets". However, as with all official announcements by the state-owned media, it is important to read the intent between the lines. The intent is a nationwide focus on the blockchain technology.
• Interestingly, there is zero mention of the word "crypto". Historically, China has been lukewarm towards cryptocurrencies, with centralized exchanges trading still banned since 2017. Narrative-wise, China appears to make a distinction between "blockchain" and "crypto".
• Relatedly, China has been researching its own central bank-issued digital currency, backed 1:1 by renminbi reserves.
• Bitcoin ($BTC) is up 10% since the announcement. This is the first time in recent months that a major price action is likely driven by a news event.

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