Bitcoin is the first blockchain technology success

The Xinhua News Agency, a Chinese state-run news agency, has published a report recognizing Bitcoin (BTC) as "the first successful application of blockchain technology."

This is a surprising development, given China's strongly negative position towards decentralized digital currencies, as demonstrated by the ban introduced in 2017 for both cryptocurrency exchanges and Initial Coin Offering.

Contents of the Xinhua article

Xinhua's article describes Bitcoin in a mostly positive way, and tells the story of the development and evolution of cryptocurrency. The piece opens with the following question: Bitcoin "represents the inevitable currency evolution, or is it just a speculative bubble?"

The article then goes on to describe the fundamental principles of the blockchain, that is to say a decentralized, immutable and trustless system that allows to transfer value in a peer-to-peer way, also covering aspects such as mining, digital scarcity and pseudo-anonymity.

At the same time the authors discuss the potential risks of Bitcoin, claiming that cryptocurrency is mainly used today for "carry out transactions in the black markets and on the dark net."

Xinhua also points out that the Bitcoin value, as a currency not supported by centralized sovereign power, is extremely volatile, unlike traditional national currencies.

Is the wind changing?

Last month, Chinese President Xi Jinping urged the country to accelerate the adoption of blockchain technology. A few days later it was also approved the first bill aimed at regulating the cryptocurrency sector, which will come into force starting from January next year.

The People's Bank of China is also developing a national cryptocurrency. It seems that China has been working on this project since 2014, but it has accelerated its development considerably following the announcement of Libra by Facebook. In fact, Beijing fears that the Libra project on Facebook will greatly reduce the power of the yuan in international markets.

Recently Giulio Tremonti, former Italian Minister of Economy and Finance, expressed a very negative opinion on the imminent Chinese CBDC:

"The Chinese system is an absolute control system. I believe the Chinese system is a control technique, not a financial technique."