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China Pushes Blockchain Experimentation, TRON Founder Banned on Weibo (Again)

2020.09.24 Matthew Lam

A weekly overview of blockchain and cryptocurrency news from China and Hong Kong.

It has been a busy week for Chinese regulators and central banks when it comes to fostering blockchain development. The State Council of China published an announcement to encourage blockchain adoption among four free-trade experimental zones. JD Digital, the digital arm of Chinese e-commerce giant JD.com, announced a partnership with the People's Bank of China's Digital Currency Research Institute to research the country's digital currency, DCEP. Meanwhile, TRON founder Justin Sun had his Weibo account banned for the fourth time. 

Here is everything you might have missed regarding these stories (and more) in this week's edition of OKEx Insights' China Market Watch.

State Council of China pushes blockchain in four free-trade experimental zones

The State Council of China highlighted the importance of blockchain technology by fostering the development of four free-trade experimental zones in China:

  • Beijing
  • Hunan
  • Anhui
  • Zhejiang

According to the State Council's announcement, the use of blockchain technology facilitates a paperless cross-border trading environment and helps to formulate technical and regulatory standards in free-trade experimental zones.

Key takeaways

  • The purpose of blockchain applications differs slightly in each free-trade experimental zone. The Beijing experimental zone aims to construct a digital trade finance ecosystem and support the research and adoption of DCEP. For the Hunan experimental zone, the aim is to enhance offerings in financial services. The Anhui experimental zone aims to streamline the administrative processes, while the Zhejiang experimental zone aims to use blockchain technology to establish a regulatory sandbox for fintech projects.
  • The free-trade experimental zones further illustrate China's push to be the world leader in blockchain solutions.

Justin Sun's Weibo banned for the fourth time

TRON founder Justin Sun had his Weibo's account banned for the fourth time. According to Weibo's official account, Sun's account ban follows violations of the Weibo community rules.

Despite the ban of Sun's personal account, Weibo accounts for his crypto projects — such as TRON and DeFi project JustSwap — remain in normal operation.

Key takeaway

  • Sun is well known for his aggressive (and arguably disingenuous) marketing strategy in the crypto space. On Sept. 19, Sun claimed that JustSwap is the first-ranked decentralized exchange and that he is considering launching an airdrop for JustSwap users. Furthermore, the TRON Foundation recently apologized to the public for Sun's false statement that TRON reached 10 billion users — a number greater than the population of the planet. The fourth ban of his personal Weibo account is, therefore, unsurprising.

JD Digital partners with PBoC in DCEP research

JD Digital, the digital arm of Chinese e-commerce giant JD.com, announced a partnership with the People's Bank of China's Digital Currency Research Institute to conduct research on China's official digital currency, DCEP.

The announcement stated that JD Digital will foster DCEP research in developing blockchain infrastructures and use cases for mobile payments. For instance, the partnership may leverage the expertise of JD Digital to develop a digital wallet for DCEP.

Key takeaway

  • JD Digital recently drew massive attention from the Chinese financial markets following its IPO application on the STAR Market of the Shanghai Stock Exchange on Sept. 11. As shown in the company's prospectus, JD Digital participated in a research report about digital currency innovation that was led by the PBoC and the Payment and Clearing Association of China.

HSBC stock price plunged to a 25-year low

This week, the stock market in China dropped slightly, as the Hong Kong stock market plummeted. As of press time, the Shanghai SE Composite and CSI 300 are currently trading at 3,280 and 4,652, and with a weekly loss of 0.13% and 0.6%, respectively. In Hong Kong, the Hang Seng Index dropped 4.01% this week and currently stands at 23,734.

 The Chinese stock market dropped slightly, while the Hong Kong stock market plummeted. Source: Trading Economics, Investing.com

Stock market participants turned their attention toward the plunging stock price of HSBC (HKG: 0005) this week. The share price of HSBC plummeted to a 25-year low of HK$27.90. This is driven by leaked FinCEN documents, which state that some of the world's largest banks are involved in suspicious fund transfers of over $2 trillion. 

Additionally, it is reported that HSBC is a potential candidate under the "unreliable entity list" by the Chinese government. 

Key takeaways

  • Apart from HSBC, some of the world's renowned banks suffered from massive share price drops following the leak of the FinCEN files. For instance, Standard Chartered's shares plunged by 6.18%. Shares of Deutsche Bank (ETR: DBK) fell by more than 8% and JPMorgan Chase's (NYSE: JPM) shares fell by more than 3%.
  • Businesses under the "unreliable entity list" are prohibited from investment, import and export activities in China. Additionally, their staff is not allowed to enter China.


Disclaimer: This material should not be taken as the basis for making investment decisions, nor be construed as a recommendation to engage in investment transactions. Trading digital assets involve significant risk and can result in the loss of your invested capital. You should ensure that you fully understand the risk involved and take into consideration your level of experience, investment objectives and seek independent financial advice if necessary.


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