This week in crypto: China embracing Blockchain technology, turmoil at Bitmain and Russian mining company to mine 20% of Bitcoin supply
China is Embracing Blockchain Technology
Last month, China's president, Xi Jinping, publicly supported the blockchain technology, stating that the nation should take the dominant position. Xi is the first major world leader to publicly support the distributed ledger technology.
China ended a two-year ban on cryptocurrencies and now wants to use blockchain technology to improve tracking of its own citizens.
China's central bank also explored the possibility of creating a cryptocurrency in 2014, but cryptocurrencies were banned in the country, along with all social media posts related to bitcoin.
Today, China is working on developing its own central bank digital currency, due to the threat from Facebook's Libra currency. The launch of China's national cryptocurrency is expected for the beginning of next year.
Chinese officials from Guangzhou have introduced subsidies totaling 1 billion RMB ($150 million) for "outstanding blockchain projects”, just two days after Xi’s speech. China's interest appears to have had a positive impact on cryptocurrencies, as the price of Bitcoin also rose by 20 percent.
China developing its own national digital currency is another proof that digital currency is the future.
Turmoil at Bitmain
Also in China, Bitmain, the company that has three-quarters of the world market for machines that mine bitcoin, has seen its exiled founder return in a coup to oust the other.
Wu Jihan, who had stepped back from his role at the company, had returned to oust Micree Ketuan Zhan as a legal representative and executive director. Mr. Wu sent an email to employees threatening punishment if they continued to communicate with Mr. Zhan or carry out his instructions.
Mr. Zhan and Mr. Wu led the six-year-old company as co-chief executives until early this year, when both of them left their positions.
It’s not clear how Bitmain’s board reached this decision as Zhan was still a major shareholder of Bitmain with 36 percent of Bitmain’s holding company while Wu owned only 20 percent.
Russian Mining Company to Mine 20% of Bitcoin Supply
Meanwhile, Russian Mining Company is determined to allow Russian miners to compete with China that keeps more than 70 percent of Bitcoin mining. RMC is planning to build a new facility in the northern province of Karelia.
The new facility could be mining up to 20% of Bitcoin supply, while currently only 10 percent of the world’s BTC production is mined in Russia.
At the same time, Russia’s largest oil company Rosneft has decided to switch away from the US dollar to euro in order to minimize its exposure to US sanctions.
According to Rosneft’s executive, the Chinese yuan could become a much more important global currency because of Chinese economic growth, making the US dollar less and less relevant in the future.