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China Unveils Public Blockchain Initiative with Conflux Network Amidst Regulatory Landscape

Despite mainland China’s traditionally cautious approach to cryptocurrencies, the Chinese government has surprised many by spearheading the launch of a new public blockchain infrastructure platform in partnership with Conflux Network.

Unveiled as the “Ultra-Large Scale Blockchain Infrastructure Platform for the Belt and Road Initiative,” this ambitious project seeks to provide a foundational public blockchain tailored for cross-border applications. The initiative was highlighted in a recent April 1 post on the X platform by Conflux Network.

Conflux Network, operated by the Conflux Foundation, which is also recognized as the Shanghai Tree-Graph Blockchain Research Institute, serves as a versatile multichain blockchain ecosystem.

Cryptocurrency continues to flourish in China, despite the ban on trading

Despite mainland China’s stringent stance against cryptocurrencies, the government has initiated a blockchain infrastructure project. This move comes in the wake of China’s crackdown on the crypto industry, which began in 2017 with the closure of Chinese Bitcoin exchanges.

Despite the ban on crypto trading, a significant portion of Chinese investors, approximately 33.3%, hold substantial amounts of stablecoins, trailing only behind Vietnam, where 58.6% of investors hold stablecoins, as per a December 2023 report by Vietnamese venture capital firm Kyros Ventures.

Chinese traders have devised methods to navigate around the trading ban, with many opting to trade on centralized crypto exchanges (CEXs), according to the Kyros Ventures report.

In 2021, Beijing implemented bans on crypto trading and mining, and offshore exchanges were prohibited from providing services in China. Prior to the crackdown, China controlled a significant portion of the global Bitcoin mining hashing power.

Responding to calls for heightened industry oversight, China is poised to amend its Anti-Money Laundering (AML) regulations to encompass cryptocurrency-related transactions. This proposed amendment, the first major revision to China’s AML regulations since 2007, aims to impose stricter guidelines to combat crypto-related money laundering.

Reports indicate that “virtual currency trading platforms” played a role in facilitating a $2.2 billion underground banking operation, enabling circumvention of the country’s foreign exchange restrictions, as detailed in a December 24 report.

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