A Beijing-based company is moving ahead to create a blockchain solution that will help develop and manage forests in the northern Sichuan province of China. Beijing Sinfotek Group – the company that will create the blockchain – and the local government have formed a new company together in order to keep tabs on the operation. This company is listed as Hangzhou Yi Shu Blockchain Technology Co., Ltd.
The official purpose behind the new company was listed as “forestry economic development and industrial poverty alleviation.” At a time when China is clamping down on blockchain and crypto activity, this new project comes as quite a surprise. Earlier in the week, a blockchain company teamed up with another local government to implement a blockchain to track and authenticate Wuchang rice in a bit to prevent imitations from entering the market.
Top Chinese Firms Taking the Ban Seriously
Two of the biggest firms in China have taken the new government advice very seriously, having already implemented solutions to stamp out crypto activity within their remit. WeChat disabled accounts of around eight crypto companies, including the popular crypto exchange Huobi. China’s biggest search engine – Baidu – also joined in by shutting down several crypto forums and adjusting its search engine ranking algorithms to automatically filter out sites related to crypto activities. Alipay – a subsidiary of Alibaba – has also come out and announced it will do its best to block transactions to crypto related companies, especially crypto exchanges.
Unclear How to Proceed in China
Despite the Chinese government ordering nation-wide crackdowns on crypto activity, certain aspects of blockchain and crypto activity appear to be permitted. Bitmain – the largest ASIC chip manufacturer and miner of BTC – continues to thrive and grow in China despite the crypto crackdown. It has even filed an application to launch an IPO on the Hong Kong Stock Exchange. This sends mixed signals and can become rather confusing.
Companies operating in the blockchain and crypto industry have been left out of the loop on what is acceptable and what isn’t. It appears the government is currently handpicking blockchain and crypto projects that it dislikes and removing them from China, while letting others thrive.
Regulation on the Horizon?
The latest crypto crackdown by the Chinese government could be a knee-jerk reaction to prevent too many companies getting ahead of themselves. There is also likely a fear that these companies could use loopholes in new regulations to continue operating in an unregulated fashion. In Malta, many companies rushed to launch blockchain and crypto projects as to be exempt from the incoming blockchain laws for a handful of years. China might have noticed this and is doing its utmost to ensure that when any regulations go live, all companies are abiding by them.
Forestry management is vital in ensuring that storms don’t wipe out villages, something we saw during the last rainy season in northern China. In fact, in the Sichuan province – the same province the new blockchain project will be launched in – a number of crypto mining farms were wiped out by storms, knocking 13 million TH/s from the total Bitcoin network hash rate. Proper forestry management regulated by a blockchain and smart contracts would help prevent flooding in these rural areas, potentially saving the government billions in cleanup and rehousing efforts.
