China is taking blockchain technology very seriously indeed.

President Xi Jinping has urged more efforts to develop blockchain technology and underscored its importance for technological innovation and industrial transformation, the state-run Xinhua News Agency reported on Friday.

Bitcoin’s price surged over 30% after the report.

China’s blockchain sector is said to be early in its development when it comes to technology, policies, talent and infrastructure, as well as legal and regulatory frameworks.

Multiple industry insiders have warned of potential risks. “We hope the authorities’ attention can really boost the industry’s development of blockchain and its applications, and will not lead to an ‘extravaganza’ of speculators and swindlers,” a manager from an internet giant told Caixin.

Years ago China saw a frenzy of initial coin offerings (ICOs) that grew out of control and triggered a regulatory crackdown. In September 2017, China banned all ICO activities, declaring them a form of illegal fundraising, and shut local cryptocurrency platforms that facilitated them. Major exchanges based in China then had to move overseas. The authorities also said last year that speculation, market manipulation and violations of regulations were common.

However, China’s authorities seem to believe blockchain technology holds promise for things like supply chain finance and data sharing among government agencies.

Read the full story on Caixin Global soon.

Contact reporter Timmy Shen (timmyshen@caixin.com)

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