- A rising number of companies in China are claiming to be related to blockchain technology.
- Multiple media outlets have issue warnings to put an end to the frenzy.
- The Chinese government vows for blockchain, not cryptos.
Following Chinese President Xi Jinping’s decision to “accelerate the development of blockchain technology,” a massive number of companies in the nation claimed to have shifted their focus towards blockchain. The move was seen as a way to improve brand awareness, generate buzz, and subsequently drive their stock prices. Now, several media outlets have issued warnings to combat the madness.
Speculating on Blockchain Technology
Xinhua News Agency, the official state-run press agency in China, recently published a report warning investors about the resurgence of businesses speculating on blockchain technology, which seems to be correlated with President Xi’s endorsement.
In the publication, Xinhua said that 500 out of the “3,000-strong listed” firms in China are claiming to be adopting blockchain technology. However, only 40 companies have been able to back up their claims with full disclosure of their business model.
As more businesses begin to operate under the disguise of blockchain technology, Chinese regulators are stepping up their efforts to put an end to the frenzy. The People’s Bank of China and Shanghai’s financial regulator issued a co-signed statement encouraging local government agencies to supervise companies that have made blockchain-related statements.
Dong Shaopeng, an adviser for the China Securities Regulatory Commission, told the Global Times that companies must divulge whether they are pivoting into blockchain technology to avoid further repercussions.
Companies could face reprimands from the stock exchange, fines, and barred from market access for those whose statements are found to be untrue.