Conflux Network: China’s New Public Blockchain

The Chinese government has recently launched a new blockchain infrastructure platform called the “Ultra-Large Scale Blockchain Infrastructure Platform for the Belt and Road Initiative.” The platform, led by Conflux Network, aims to provide a public blockchain for cross-border applications. The project intends to support the implementation of cooperative projects across borders. Conflux Network is operated by the Conflux Foundation, also known as the Shanghai Tree-Graph Blockchain Research Institute.

This governmental blockchain initiative is noteworthy considering China’s past reluctance towards cryptocurrencies. Since 2017, the Chinese government has been tightening its control over the crypto industry, resulting in the shutdown of Chinese Bitcoin exchanges. Despite the trading ban, a significant number of Chinese investors continue to hold stablecoins, making them the second-highest in this category after Vietnam. Chinese traders have found ways to bypass the ban, with many opting to trade on centralized crypto exchanges.

In 2021, Beijing prohibited crypto trading and mining and banned offshore exchanges from operating in the country. China used to control a significant portion of the global Bitcoin mining hashing power before the crackdown began. Now, calls for increased scrutiny of the industry have prompted China to revise its Anti-Money Laundering (AML) regulations, with a particular focus on cryptocurrency-related transactions. This amendment aims to impose stricter guidelines to combat money laundering facilitated by virtual currency trading platforms.

Previously, a report revealed that these platforms assisted in an underground banking operation worth $2.2 billion, which allowed individuals to bypass foreign exchange restrictions imposed by China. This incident highlights the importance of implementing more rigorous regulations to prevent similar occurrences in the future. China’s new blockchain infrastructure platform demonstrates the country’s continued interest in exploring the potential benefits of blockchain technology while still exerting control over the cryptocurrency industry.