IBT: How To Operate In China’s Blockchain ‘Sandbox’ Despite Recent Crackdown – By Omer Ozden

July 2, 2021

(Excerpt below - read the full article on International Business Times)

What's next?

As the cryptocurrency markets grow in their impact both globally and domestically in China, we can expect more regulatory scrutiny, and an increasing number of blockchain and crypto-related activities that potentially cross the "red lines" of the central government's policies.

In the future, you can expect to see this come where domestic retail investors are exposed to the high-risk speculative price fluctuations that are pervasive in cryptocurrencies. For example, the high leverage many secondary market traders take is a sensitive, potentially "systemic" risk. Yet at the same time, the Chinese government is the most powerful advocate of blockchain technology on the planet today, and although there is no official advocacy of bitcoin and cryptocurrencies, any industry expert knows that tokens are an integral and inalienable pillar of the technology.

Once Beijing's leadership decrees that something is to be a national focus, the results are swift and the plans are generational. And its top-down approach to making blockchain a national priority has produced what might be equated to the largest regulatory sandbox in the world for the technology. One where there is substantial domestic blockchain innovation, as today there are more blockchain patents filed in China than any other market, and where adoption surpasses just about any other market. It is this environment of early adoption that resulted, for example, in China years ago becoming the home to the majority of bitcoin hash power globally. Just remember to respect the red lines.

The leadership of China gets it: Blockchain is one of the most strategically impactful technologies in the world today. And that's important for leadership that thinks generationally.

(Omer Ozden is the CEO of RockTree Capital, a merchant bank that focuses on blockchain projects and mobile internet companies)