One day following the March 5th meeting of the National People’s Congress and the Chinese People’s Political Consultative Conference in Beijing, Zhang Ye, a chief Chinese regulator, announced an official view that the centralization of blockchain-based systems was preferable to complete decentralization. He further elaborated that when taking into consideration the centralization of blockchain-based systems, things had to be heavily clarified, with implications of further regulation for China’s emerging blockchain competitors.
Zhang otherwise praised the technology, yet he also noted that the full benefits of blockchain-based systems would not be grasped until they are moved into a centralized infrastructure. Zhang went on to say during an interview with Securities Times, an organization that specializes in covering the security industry in China, that “Blockchain’s advocates for absolute decentralization have no solid ground, because [blockchain] itself is a software developed in a centralized way. So is the public key infrastructure, which remains an important feature adopted by blockchain.” This point of view falls in line with the tendencies of the centralized government in Beijing, which has historically sought to maintain control over digital communications and infrastructures in the country. The Great Firewall of China is a prime example of this mindset.
Still, Zhang didn’t completely dismiss the benefits that come with decentralized blockchain systems. He even remarked that they could have sizable advantages in some situations. Yet he indicated skepticism as to the benefits of current applications remaining fully decentralized. Zhang went on to say, “The key is to explore how to achieve decentralization through a centralized infrastructure.” This is not the first official indication that the Chinese government plans to become an active player in blockchain based technologies and cryptocurrencies. Last October, officials from the People’s Bank of China announced their intentions to investigate the possibility of issuing an officially backed cryptocurrency.