SHANGHAI: Chinese state media urged investors to remain rational and not take Beijing’s support for blockchain as a boost for virtual currencies, after comments by Chinese President Xi Jinping drove up shares in blockchain-related firms and the price of bitcoin.
Xi said last week that China should accelerate the development of blockchain technology, a digital ledger that forms the backbone of many cryptocurrencies such as bitcoin. His remarks sparked a rush into the shares of firms engaged in, or believed to be engaged in blockchain or digital currency-related businesses.
“Blockchain’s future is here but we must remain rational,” the People’s Daily newspaper, which is published by China’s ruling Communist Party, said in a commentary late on Monday.
“The rise of blockchain technology was accompanied by that of cryptocurrencies, but innovation in blockchain technology does not mean we should speculate in virtual currencies,” it said.
Traders from three Chinese brokerages also told Reuters that they received a notice from the Shanghai Stock Exchange on Monday which said, “for any blockchain-related (topics), we ask listed companies to make statements based on facts and not make any exaggerated claims or create vicious hype”.
The government cracked down on the country’s cryptocurrency industry in 2017 with regulators banning the practice of creating and selling virtual currencies or tokens and shutting local cryptocurrency trading exchanges, saying they were facilitating illegal fundraising and pyramid schemes.
Chinese officials, however, said at the time that research into blockchain technology was still encouraged although Xi’s comments were the first time Beijing had publicly thrown such support behind the sector.
Beijing is also creating its own central bank-issued digital currency to cut the costs of circulating paper money and boost policymakers’ control of money supply.
In a separate development, Canaan Creative, one of China’s biggest bitcoin mining hard-ware makers, filed to publicly list on the Nasdaq on Monday to raise US$400 million (RM1.67 billion), marking at least its third attempt to do so after previous failed tries in mainland China and Hong Kong.
The Hangzhou-based company, which describes itself as the world’s second largest bit-coin mining machine designer and maker in its prospectus, said it wanted to use the cash to fund research into artificial intelligence and blockchain research, as well as to pay off debts.
It did not say why it had decided to try again for another initial public offering at this time. It tried to list itself in China three years ago through a reverse merger by buying a Shandong-based electric equipment maker and then again filed for a Hong Kong float last year, however both plans fell through as regulators had doubts about its business model and prospects. – Reuters
source https://www.thesundaily.my/business/china-state-media-urges-calm-after-blockchain-stocks-bitcoin-price-soar-LE1547386
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