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CHINA TURNS TO BLOCKCHAIN AS CORONAVIRUS SPINS OUT OF CONTROL

The Rundown

  • Scandals and Chaos Surround the Coronavirus
  • Blockchain Tech to Help Coronavirus Victims
  • The Rise of Emerging Tech in China

With 65,000 people infected with the coronavirus and more than 1,400 fatalities in China, many basic medical supplies are scarce. To improve donation efficiency amid the crisis, Chinese startup Hyperchain has launched a blockchain-based solution.

SCANDALS AND CHAOS SURROUND THE CORONAVIRUS

According to the South China Morning Post (SCMP), there has been a series of scandals in China regarding public donations since the coronavirus broke out. 

These have served to shake peoples’ confidence in how their funds are being distributed by state-backed charity organizations. They have also provoked outrage as hospitals report a shortage of face masks for front-line staff treating infected patients.

On Feb 1, the Red Cross Society of Hubei issued a statement on its website. It said that the organization was deeply distressed, felt guilty, and “blamed themselves” for the problems associated with the distribution of donated materials.

In fact, their poor management of the situation led to the removal of a Red Cross Society official in Hubei on Feb 4 for “dereliction of duty in the fight against the novel coronavirus epidemic.”

BLOCKCHAIN TECH TO HELP CORONAVIRUS VICTIMS

In a bid to combat this, Chinese blockchain startup Hyperchain backed by the China Xiong’an Group has developed a blockchain-based donation tracking platform called Shanzong. Launched on Monday, it had already recorded 500 donations as of yesterday.  14 BTC & 30,000 Free Spins for every player, only in mBitcasino’s Crypto Love Affair! Play Now!

Doners can track their donations at every stage and see when their money is matched to the needed medical equipment. Some of the donors so far include the Yuegou Living Supermarket and the New Sunshine Charity Foundation.

Among the recipients are the Jiayu People’s Hospital, the Tongshan People’s Hospital, and Xiantao No. 1 People’s Hospital in Hubei. All these are facilities directly fighting to treat people infected with the coronavirus. Hyperchain said in a statement:

Shanzong guarantees the authenticity of donation information by putting it on the blockchain, which then cannot be changed or deleted… This is the biggest difference [with traditional charitable donations].

THE RISE OF EMERGING TECH IN CHINA

Chinese President Xi Jinping caused the cryptocurrency markets to soar when he came out in support of blockchain technology in 2019, pledging greater funding and research in China.

The coronavirus outbreak is now showing authorities practical cases in which blockchain can be used, beyond the supply chain or improving local government efficiencies. 

The disease epidemic has also given a push to other emerging technologies, including AI and drones, as the Chinese authorities scramble to better detect and diagnose the deadly virus.

AI pioneers Baidu and Megvii have developed advanced temperature screening tools for major Beijing railway stations, while autonomous robots are replacing human cleaners in infected wards. 

Authorities are also using drones in some remote parts of the country to ensure that citizens are using facemasks.

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Blockchain

JP Morgan Blockchain Report: Bitcoin (BTC) Price, Stablecoins, Payments

JPMorgan Chase, the multinational investment bank, is one of the pioneers of blockchain research and adoption among the giants of classical banking. Its analysts prepared a thorough review of the most important events, processes and trends the blockchain and cryptocurrency sphere went through in 2019.

Has blockchain entered the financial mainstream?

Despite all rollercoaster rides the crypto marketsэ capitalization suffered from last year, for the analysts of JPMorgan Chase, it was the year of the overwhelming adoption of decentralized technologies, so, the report in particular says:

“2019 will be remembered for the rise of digital money.”

The report mentions both successful (PAX, USDC) and failed (Libra, Petro) attempts to disrupt classical payment and remittance institutions with crypto. All in all, the world is ready for еру private payments. This statement is proved by the global growth in all types of non-cash payments (e-payments, cards, mobile wallets) in Asia.Must ReadRipple’s XRP to Be Used for Cross-Border Payments in Southeast Asia, Latin America, and Africa –

By the way, blockchain-based systems have yet to overcome numerous challenges on their way to mass adoption. First of all, it is price volatility. As outlined in the report, it is volatility of crypto behemoths, mostly Bitcoin, that makes institutions focus on stablecoins. Also, the huge gap between Bitcoin market capitalization and its intrinsic value yet corrected by the price recovery is another obstacle on its way to investors’ portfolios.

Stablecoins on the march

Stablecoins, both corporate and state-backed (CBDCs) are also in the spotlight of the community and regulatory boards. The market is desperate for their toolkit to provide them with plenty of use-cases.

Stablecoins in the system of modern money transfer tools

Image via IMF

Stablecoins may potentially reach a wide adoption in the sphere of cross-border remittances and banking settlements. Numerous banking institutions across the world are looking to issue their own stablecoins or use corporate ones.

JPMorgan analysts have named one more serious threat to crypto adoption. It is the implementation of quantum computations into the distributed technologies. They can seriously undermine DLT security and enable dramatic hacks. 

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JPMORGAN SAYS BLOCKCHAIN IS LAYING FOUNDATIONS FOR DIGITAL MONEY

The Rundown

  • JPMorgan Reports Huge Moves Towards Blockchain
  • The Recent Growth Of Blockchain
  • What are the challenges — according to JPMorgan?

JPMorgan released a report last Friday, detailing the global enthusiasm for blockchain technology in the financial sector.


In the 74-page report, JPMorgan described several projects that have developed the ‘real world’ financial application and as a result describes 2019 as the year of “the rise of digital money”.

In the report, the US investment banking heavyweight elucidates many of the most promising use-cases which it sees as having the potential for wide-spread adoption in the financial sector.

JPMORGAN REPORTS HUGE MOVES TOWARDS BLOCKCHAIN

In the report, JPMorgan describes the way in which blockchain — the technology which allows a ledger to be controlled by multiple agents — is being rapidly taken up by financial and political actors.

They suggest that the “groundwork is now in place” for the massive adoption of blockchain in the realm of “Payments, trade finance, and custodial services”, which “remain the clearest use cases for blockchain”.14 BTC & 30,000 Free Spins for every player, only in mBitcasino’s Crypto Love Affair! Play Now!

JP Morgan says that the merits of the technology are to facilitate cross-border payments using digital assets and in allowing some equity trades.

THE RECENT GROWTH OF BLOCKCHAIN

Over the last several years, research, investment in blockchain technology have been taken up by some famous brand names: Facebook (with their Libra coin), the Winklevoss brothers’ (Gemini coin), and JPMorgan (with the JPM coin).

Governments are moving in as well: For example, China is said to have been developing a new digital Yuan, which will be regulated by the central bank there, and Great Britain’s Bank of England has announced the start of its research into creating a digital currency.

The attempt to successfully adopt distributed ledger technology and create a digital currency has become akin to a technical arms race mirroring the episode Winklevoss vs. Zuckerberg to establish a social network and the historical arms race between West vs East.

WHAT ARE THE CHALLENGES — ACCORDING TO JPMORGAN?

While the report discusses the massive uptake and rise of blockchain technology — it is not overly optimistic. After giving encouraging descriptions of the changes, the firm demotes the cryptocurrency project as a second rate investment.

“Developments have not altered reservations about the limited role that cryptocurrencies play in global portfolio diversification or as a hedging instrument,” JPMorgan warns.

They argue that crypto acts as a ‘hedge’ to protect their investments from loss of confidence in traditional currency.

This differs from the attitudes of many crypto asset management firms, such as Enigma Securities who recently told me that they believe cryptocurrency should soon play a pivotal role in hedge fund portfolios.

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China’s banks continue to embrace blockchain despite scalability, usability concerns

The world of regulators has been itching to regulate cryptocurrencies and device a solution to avoid any economic “threat” that comes with it. Development announcements made by countries like China, Singapore, Japan, and Thailand concerning centrally-backed digital currencies are seen by many as a way to contain this “threat” posed by crypto.

However, even though the idea has been a hit among some nations, China is the one making the most progress with its ‘Digital Currency Electronic Payment’ that will be pegged 1:1 to the RenMinBi [RMB], a project that is expected to launch in 2020. However, China has also been the first to wave its ‘blockchain, not crypto’ credentials. The People’s Bank of China’s latest announcement claiming that more Chinese banks are using the official blockchain platform for trading and finance-related activities validates this point.

According to reports, the official blockchain platform that was launched in September 2018 had 38 banks participating by December 2019, generating a business of 87 million Yuan [$12.4 billion]. However, what is interesting to note is that the blockchain platform in question, a platform that provides services like multi-stage accounts receivable financing, a fast track for rediscounts, and supervision over foreign trade payments, was deemed incompetent for high volume payment solutions.

Further, despite the fact that China seems to be fully on-board the blockchain experiment, the Chinese continue to research the pros and cons of the technology.

A recent paper published by the Digital Currency Research Institute’s Blockchain Research Group, a team that is assisting the PBoC with the DCEP, elaborated on the positives and negatives of blockchain usage.

While defining the positives, the group noted blockchain’s ability to provide credible data, equalization of participating subjects, and multi-dimensional supervision. However, scalability was one of blockchain’s woes, as the paper highlighted.

It stated,

“In terms of performance, the performance and scalability of the blockchain is still limited.”

The paper added,

“As the number of participating nodes increases, the overhead of data synchronization and verification increases, and the performance of the system will be further reduced, thereby affecting the scalability of the blockchain.”

Other notable problems the research report focused on were security concerns, storage, interaction, operation and maintenance, compliance and functions that mark blockchain’s decentralized nature and “conflicts with the centralized management requirements of the central banks.”

Despite blockchain’s popularity among banks, however, it appeared that the researchers were not too certain of its usability in the bigger financial picture. The report concluded,

“The blockchain at the cost of synchronous storage and co-calculation of a large amount of redundant data, sacrifices system processing efficiency and some of the customer’s privacy, and is not yet suitable for high-concurrency scenarios such as traditional retail payments.”

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