Hong Kong, CHINA – The Chinese government is partnering with Chinese tech giant Tencent to form the China Blockchain Security Alliance and Beijing pushes forward with developing blockchain technology. Tencent is the owner of China’s ubiquitous chat and social media app, WeChat. Identified as a key pillar of China’s “economic revolution” by Chinese President Xi Jinping, blockchain research and development in China has been receiving billions of dollars in government investment as well as support from local and national government initiatives. According to state-owned media ChinaNews, the alliance is to promote security in the blockchain industry and was announced on Thursday at the China Blockchain Security Forum held in Beijing and hosted by the government-backed China Technology Market Association. Although the public blockchain, on which cryptocurrencies such as Bitcoin and Ethereum are built, is a secure, immutable and tamper-proof decentralized database, private blockchains, the sort that Beijing is interested in building, are not.
According to ChinaNews, Tencent’s cybersecurity arm, the China Technology Market Association as well as the China Blockchain Application research Center, along with over twenty other public and private institutions, including government advisory agencies, network security firms and blockchain-linked organizations will form the alliance. Notable however, is the stated aim of the alliance which is to work to establish long term mechanisms for the secure development of China’s blockchain ecosystem, as well as to crack down on illicit activities in the blockchain space and in particular pyramid schemes and fraud. Initial coin offerings (ICOs) and cryptocurrency trading are banned in China, but that hasn’t stopped enterprising Chinese from circumventing laws to conduct offshore ICOs or to trade in Bitcoin and its ilk. Blockchain as a technology does not lend itself to pyramid schemes and the aim of the alliance may possibly be to set up a regulatory framework with which to govern the eventual lifting of the ban on cryptocurrency trading, something not altogether impossible and which even state-owned media Global Times has called for.
The latest alliance marks a higher level of co-operation between Tencent and the Chinese government. Last month, Tencent announced that it would be working closely with the Shenzhen government to use the blockchain to fight tax fraud.