China Will Let Solely Cryptoyuan Into Country – Blockchain Comp. Co-Founder

On the sidelines of the economic forum in Yalta, Russia, Sputnik has talked to Huan Zhang, co-founder of DAEX Blockchain Group Limited, about the current cryptomarket developments in China as well as the prospects of joining forces with Russia in the field.

China won’t allow any cryptocurrency other than digital yuan to circulate in the country, Huan Zhang told Sputnik.

DAEX is currently working on a clearing ecosystem for virtual currencies. According to Huan Zhang, the company is actively collaborating with Russia  to introduce a clearing system  that will enable people to trace and regulate all the wealth of cryptocurrency transactions.

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Responding to Sputnik’s question on whether there is a clash between the decentralized nature of blockchain and the centralized clearing platform, Zhang noted that these two processes should be well balanced for the cryptomarket to function normally.

"It is critical to understand how a cryptocurrency exchange operates. There is a need for some custodian [bank], which would monitor digital assets. There is none to date."

According to her, the idea to create a regulator for the cryptomarket is a good one. Many countries are trying to adopt the respective legislation, and a number of them ban cryptocurrencies altogether.

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"China, for instance, treats the blockchain technology in a very positive way, but the country’s authorities fear cryptocurrencies. The Chinese Central bank is working on its own digital coin – the cryptoyuan. The authorities won’t allow any other cryptocurrency to circulate in the country."

In this respect, the Russian legislation is more amicable towards virtual coins, Zhang noted.

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"Russia is more open to new technologies. They invigorate the country’s economy. Perhaps, this is why Moscow hosts so many conferences dedicated to blockchain. I am actively working with our Russian partners, many of whom are interested in starting new mining pools or local cryptocurrency exchanges.  So, we will surely collaborate with them and hand them over the respective technologies."

Russian President Vladimir Putin tasked the legislative body with formally determining (codifying) the status of cryptocurrencies by July 2018 and define such notions as mining, a token and smart contract.

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A bill on digital financial assets has been brought before Russia's Parliament. It recognizes a cryptocurrency as a digital financial asset, but not as a lawful payment means. In the meantime, fiat money is proposed to be exchanged for virtual currencies on specially licensed platforms.

In September 2017, China outlawed cryptocurrencies and ICOs, or initial coin offerings, prompting companies to operate under other jurisdictions. Later, Beijing banned adverts of foreign exchanges on the internet and social networks, and advised national banks not to handle deals involving cryptocurrencies. Amid the new regulations, the number of events dedicated to blockchain has dipped. 

For instance, most recently, the Shanghai police interrupted a blockchain conference. Although it was officially declared that it had been done out of security concerns, the conference participants assumed that police had dispersed the conference fearing that the event could serve as a platform for covert ICO road shows.

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