As an emerging information technology, blockchain will continue to develop in depth in 2021, with continuations and breakthroughs in regulatory policies and applications, and related NFTs, meta universe, and central bank digital currencies will usher in an explosion.
In the era of digital economy, it is particularly important to grasp the development and development trend of blockchain. This article will start from the global perspective and the domestic perspective, and count the seven current status of the global blockchain development in 2021.
In order to fully demonstrate the development of the blockchain industry, 01 Blockchain and Zero One Think Tank will launch the “China Blockchain Industry Development Census Report (2021)”, and relevant institutions are welcome to participate in providing innovative cases.
(1) Global perspective: the blockchain industry is growing in steps, and the track in emerging fields is hot
1. Blockchain has become a multinational strategy, and the cryptocurrency policy has two levels of differentiation
In terms of encouraging the development of blockchain technology, more and more countries have raised the blockchain industry to a national strategic level, and introduced various measures to actively encourage blockchain technology innovation and industrial development.
China put the development of blockchain technology at the national strategic level during the 18th collective study of the Political Bureau of the Central Committee in 2019. General Secretary Xi Jinping emphasized that “the blockchain should be an important breakthrough for independent innovation of core technologies, and the main direction of attack should be clarified. Increase investment, focus on conquering a number of key core technologies, and accelerate the development of blockchain technology and industrial innovation.”
In the United States, in October 2020, the U.S. government announced the “National Key Technology and Emerging Technology Strategy”, which included blockchain as a regulatory technology to protect the security of national infrastructure. In addition, most state governments in the United States have clearly defined their regulatory stance on blockchain technology, and many state governments have formulated or promulgated laws in the field of blockchain.
In addition, countries including Germany, Australia, Singapore and other countries have also made clear their policies for the development of blockchain. On September 18, 2019, the German Federal Government reviewed and approved and issued the “German Blockchain Strategy”, which clarified the national strategy of blockchain and believed that blockchain technology will be an integral part of the Internet in the future and can effectively contribute to the development of Germany’s digital economy. .
The Australian government released a 52-page blockchain industry roadmap in February 2020, emphasizing the potential of blockchain technology and proposing methods for designing a regulatory framework for specific industries. Singapore has also invested a lot of money in technological innovation. The government allocated 12 million US dollars in December 2020 to promote the innovation and commercial use of blockchain.
While deploying and researching blockchain technology, countries are also strengthening the supervision of the virtual currency market. China has always banned virtual currency trading activities in the country, and since this year it has also issued policies to suppress virtual currency trading and “mining” activities.
In the United States, despite the existence of a large number of cryptocurrency investors and blockchain companies, the country has not yet formulated a clear regulatory framework for the asset class of virtual currencies. The U.S. Securities and Exchange Commission (SEC) generally treats cryptocurrency as a security, the Commodity Futures Trading Commission (CFTC) refers to Bitcoin as a commodity, the Treasury Department refers to it as currency, and the U.S. Internal Revenue Service (IRS) refers to cryptocurrency as a commodity. Class of property for federal income tax purposes.
U.S. cryptocurrency transactions fall under the supervision of the Bank Secrecy Act (BSA) and must be registered with the Financial Crime Enforcement Network (FinCEN).
Countries such as the European Union, Canada, Japan, and Australia have clarified the asset classes of cryptocurrencies and adopted proactive policies. Cryptocurrency is legal in most parts of the European Union, and the governance and taxation of exchanges vary from member to member state.
Canada classifies crypto investment companies as money service companies (MSB). Cryptocurrencies are taxed similar to other commodities. Cryptocurrency trading platforms and traders can conduct business after registration. The country became the first in February 2012 Countries that have approved Bitcoin Exchange Traded Funds (ETFs).
Japan recognizes cryptocurrency as legal property under the Payment Services Act (PSA), and at the same time treats the transaction income generated by cryptocurrency as “miscellaneous income” and tax investors accordingly. Australia classifies cryptocurrency as legal property, so it is subject to capital gains tax, and exchanges can operate freely in the country.
The UK treats cryptocurrency as property. Cryptocurrency exchanges must be registered with the UK Financial Conduct Authority (FCA) and are prohibited from providing crypto derivatives trading. Investors are required to pay capital gains tax on cryptocurrency trading profits. On September 7, 2021, El Saldova’s Bitcoin Act came into effect, becoming the first country to adopt Bitcoin as legal tender.
2. The scale of blockchain spending grows, and the banking industry leads the way
Blockchain and other distributed ledger technologies have shown great potential in improving business operation efficiency and creating new value delivery methods. Various industries and companies are implementing these technologies and integrating them into existing infrastructure and industrial plans. middle. According to statista data, global spending on blockchain solutions in 2021 is expected to reach 6.6 billion U.S. dollars. Forecasts indicate that spending on blockchain solutions will continue to grow in the next few years, reaching nearly US$19 billion by 2024.
Data source: statista
From the perspective of the effect of blockchain spending and the industry segmentation, according to the “2021 Global Blockchain Survey: The New Era of Digital Assets” survey report released by the accounting firm Deloitte, 1280 executives and practitioners in 10 regions around the world After conducting a sample survey, the results showed that the vast majority of participants (80%) said that the solutions provided by blockchain, digital assets or encrypted currencies will bring new revenue streams to their industries.
In addition, from the perspective of various industries, the banking industry is in a leading position in the adoption of blockchain, followed by telecommunications, media and entertainment, manufacturing, healthcare and life sciences, retail and consumer products, and government. And it is estimated that from now to 2024, the blockchain spending of retail and consumer goods will grow the fastest.
3. NFT, cryptocurrency, and meta-universe track are hot
In 2021, new models and business formats based on blockchain will continue to emerge. In the 2021 hot words announced by the “Collins Dictionary”, NFT was ranked the top of the hot words list, and Metaverse and Crypto vocabulary were also shortlisted in the list.
Beginning in March 2021, NFT has experienced explosive growth. The full name of NFT is Non-Fungible Token, and it is expressed in Chinese as non-fungible token. NFT is a data unit stored on the blockchain. It uses photos, videos, audios, and other types of digital files as the underlying assets, and supports the verification of the authenticity and uniqueness of the underlying assets.
According to statistics from the NFTGO website, as of mid-December 2021, the overall market value of the NFT industry has exceeded US$10 billion. It should be noted that the NFT market is still in its infancy. While promoting copyright protection and the development of the digital asset industry, it is also facing hype and compliance issues. In addition, how to integrate into the existing business model remains to be explored.
Data source: NFTGO
Crypto is the abbreviation of cryptocurrency, and cryptocurrency is also hot this year. Since the beginning of 2021, the overall market for cryptocurrencies has continued to be hot, and most of the top-ranked currencies by market capitalization have seen a sharp rise, and their overall strong performance far exceeds that of the mainstream capital market.
Among them, the best-performing BNB has risen as high as 1551.61% year-to-date. And cryptocurrency-related derivatives have also begun to flourish. On October 19, the first Bitcoin-related exchange-traded fund (ETF) in the United States was listed, and the ProShares Bitcoin Strategy ETF (BITO) had a record first-day turnover. High record.
Cryptocurrency is increasingly becoming an important component of the assets of mainstream investment institutions. According to a survey by Natixis Investment Managers, a global asset management company, 28% of all surveyed institutions currently invest in cryptocurrencies, of which nearly a third One organization stated that they plan to increase the allocation of cryptocurrencies next year.
In addition, the accounting firm Ernst & Young released a new study indicating that traditional alternative investors are slowly becoming enthusiastic about cryptocurrencies. 31% of hedge fund managers, 24% of alternative investors, and 13% of private equity fund managers stated that they plan to include cryptocurrencies in their portfolios in the next one to two years.
According to the “Collins Dictionary”, Metaverse refers to a persistent online virtual world, known as the “dream future of the Internet world.” At present, all walks of life are chasing the meta-universe track. Among them, mainstream technology companies use VR, AR and other simulation technologies as breakthroughs to create a “true Internet”. On October 28, 2021, Facebook announced that the company’s name will be changed to “Meta” , To express the company’s determination to focus on turning to an emerging computing platform based on virtual reality. Tech giants such as Tencent and Nvidia also joined the track.
In addition, virtual game platforms characterized by decentralization are also ushering in an explosion this year. Virtual platforms such as Decentraland and Roblox provide players with virtual property rights through NFT, while supporting users to freely create virtual ecosystems and other forms to create them in the virtual world. Meta universe.
4. More than 90% of the world’s economies are exploring central bank digital currencies
CBDC is a digital currency supported and issued by the Central Bank. As cryptocurrencies become more and more popular, central banks around the world are more willing to issue CBDC.
The geographic economic center of the Atlantic Council launched the Central Bank Digital Currency (CBDC) tracker to provide the latest tracking information for the global central bank (CBDC) digital currency research. The CBDC tracker analysis shows that as of mid-December, there are 87 in the world Countries (accounting for more than 90% of global GDP) are exploring CBDC, and this number was only 35 in May 2020.
At present, many countries have fully launched digital currencies. On March 31, 2021, the Eastern Caribbean Central Bank (ECCB) launched its central bank digital currency DCash, thus becoming the first monetary union central bank to issue CBDC. In the Caribbean, including the Bahamas, Saint Kitts and Nevis, Antigua and Barbuda, Saint Lucia and Grenada are implementing digital cash systems.
Nigeria launched e-Naira on October 25, 2021, becoming the first country outside the Caribbean to issue CBDC. In addition, among the world’s four major central banks (Federal Reserve, European Central Bank, Bank of Japan, and Bank of England), the Federal Reserve is the only central bank that has not committed to a digital currency test project. 14 countries, including China and South Korea, are currently in the pilot phase of CBDC and are preparing for a full-scale launch.
Chart source: Atlantic Council Research, Bank of International Settlements, International Monetary Fund, John Kiff Database
(2) Domestic perspective: The blockchain industry is advancing steadily, and the digital RMB has achieved gratifying results
1. Facilitate the development of blockchain technology, rectify virtual currency transactions and “mining” activities
As early as 2019, the development of blockchain technology has become a national-level strategy. During the 18th collective study session of the Political Bureau of the Central Committee, General Secretary Xi Jinping emphasized that “blockchain should be used as an important breakthrough for independent innovation of core technologies, the main direction should be clarified, the investment should be increased, and a number of key core technologies should be conquered and accelerated. Blockchain technology and industrial innovation and development”.
For a long time, the central and local governments have been constantly proposing various supporting and regulatory policies to help the development of blockchain technology. In March 2021, the blockchain was written into the “Fourteenth Five-Year Plan for the National Economic and Social Development of the People’s Republic of China and the Outline of Long-Term Goals for 2035”. The plan proposes to create new advantages in the digital economy and accelerate the promotion of digital industrialization. Promote the innovation of blockchain technology, develop blockchain service platforms and applications in the fields of financial technology, supply chain management, and government services with the focus on the alliance chain, and improve the regulatory mechanism.
In June, the Ministry of Industry and Information Technology and the Office of Cyberspace Affairs jointly issued the “Guiding Opinions on Accelerating the Promotion of Blockchain Technology Application and Industrial Development”, pointing out that it focuses on supply chain management, product traceability, data sharing and other real economy areas to promote the integrated application of blockchain. Support the digital transformation of the industry and the high-quality development of the industry. Promote the application of blockchain technology in government services, evidence collection, smart cities and other public service fields, and support the transparency, equality, and precision of public services.
Since the beginning of this year, while supporting the innovation of blockchain technology in industrial applications, the policy has also been firm in suppressing cryptocurrencies. Since virtual currency is easily used for money laundering and other illegal activities, and lack of exchange mechanism, it is easy to cause inflation and market chaos. my country has always adopted policies to suppress virtual currency.
In September of this year, the People’s Bank of China issued the “Notice on Further Preventing and Disposing of the Risks of Virtual Currency Trading Hype”, further clearly pointing out the attributes of virtual currencies and virtual currency-related activities, clearly proposing the working mechanism to deal with the risks of virtual currency trading hype, and strengthening trading hype Risk supervision.
On September 22, 2020, President Xi Jinping announced during the UN General Debate that China’s carbon dioxide emissions will strive to peak in 2030 and achieve carbon neutrality by 2060. Virtual currency mining, as a high-energy, high-power-consuming project, is strictly controlled by provinces and cities in the context of dual-carbon goals.
In early March of this year, the Inner Mongolia Development and Reform Commission issued a draft for soliciting opinions and proposed that it should comprehensively clean up and shut down virtual currency mining projects. Subsequently, Xinjiang, Qinghai, Sichuan, Yunnan and other provinces have carried out “clearing” activities.
On September 24, the National Development and Reform Commission and other 11 departments jointly issued the “Notice on Regulating Virtual Currency “Mining” Activities” to rectify virtual currency “mining”, and then Jiangsu, Zhejiang, Fujian, Jiangxi and Hainan provinces also started actions.
2. The number of blockchain registered companies continues to rise, and the industry is about to enter a “steady climbing recovery period”
From the perspective of the number of registered companies on the blockchain, the number has continued to rise since the beginning of this year. According to data from the “Blockchain Home” website of the National Internet Emergency Response Center, as of the end of December 2021, there were more than 93,600 registered companies related to blockchain across the country. From the perspective of regional distribution, the density of blockchain-related companies in coastal areas, inland areas of Sichuan, Chongqing, Jiangxi, and Hainan is relatively high. Among them, Guangdong Province accounts for about 37.23%, which is the highest density area in the country.
From the perspective of business distribution, applications and solutions accounted for 36.4% and 29.8%. In addition, infrastructure (12.24%), industry services (11.90%) and underlying platforms (9.56%) together constitute a complete business form.
Data source: Home of Blockchain
Starting from the maturity of blockchain technology, Gartner, a well-known IT consulting organization, published the “2021 China ICT Technology Maturity Curve Report” to evaluate China’s emerging or sought-after technologies. According to the maturity curve of China’s ICT technology in 2021, China’s blockchain technology as a whole is about to complete the process of transition from the “bubble burst trough period” to the “steady climbing recovery period”, and the next stage will enter the mature period of production, which is expected to be updated. It has been mature and effective in a wide range of scenarios.
Data source: Gartner “2021 China ICT Technology Maturity Curve Report”
From the perspective of the blockchain industry, asset management and public services are still important scenarios for the implementation of the blockchain industry. In addition, blockchain also has important application scenarios in some emerging scenarios. In the application of data sharing and privacy computing, the use of massive data in the era of digital economy requires the close integration of blockchain and various data security technologies.
In addition, emerging fields such as NFT and Metaverse have also flourished this year, and technology giants and other start-ups have also explored relevant application scenarios.
3. The digital renminbi is in full bloom, and three major challenges need to be broken through
The digital renminbi is a digital form of legal tender issued by the People’s Bank of China. It aims to create a new digital form of renminbi for the purpose of meeting the public’s cash needs under the conditions of the digital economy, and supports the reliable, stable, fast and efficient, and continuous innovation in the retail payment field. , Open and competitive financial infrastructure, support the development of China’s digital economy, improve the level of general financial development, and improve the operating efficiency of the currency and payment system.
In 2014, the Central Bank established a legal digital currency research group and began to conduct special research on the issuance framework, key technologies, issuance and circulation environment, and related international experience. At the end of 2017, with the approval of the State Council, the People’s Bank of China began to organize commercial institutions to jointly carry out legal digital currency (e-CNY) research and development experiments.
At present, the research and development test has basically completed the top-level design, function research and development, system debugging and other work. In October 2020, on the basis of the “4+1” closed pilots launched in Shenzhen, Suzhou, Xiongan New District, Chengdu and the future Winter Olympics scenes, six pilot sites will be newly expanded in Shanghai, Hainan, Changsha, Xi’an, Qingdao, and Dalian. Form a “”10+1” pilot layout.
At the same time, six regions, including Guangzhou, Zhejiang, Tianjin, Fujian, Jinan, and Hubei, which are temporarily not among the pilot regions, have also included the “striving for digital RMB pilot program” in the “14th Five-Year Plan” financial development plan or other policy documents.
On November 3, 2021, the Hong Kong Fintech Week 2021 conference was held. In the “Retail CBDC: A Lesson from the Fast Movers & the Road Ahead” roundtable forum, Mu Changchun, Director of the Digital Currency Institute of the People’s Bank of China, introduced the number The latest developments in the renminbi. According to Mu Changchun, as of October 22, 2021, the cumulative transaction amount of digital renminbi has reached approximately 62 billion yuan, 140 million personal digital renminbi wallets and 10 million public wallets have been opened.
In addition, more than 1.55 million merchants have supported digital renminbi wallet payments, with a total of more than 150 million transactions involving public utilities, catering services, transportation, retail, and government services.
In this roundtable meeting, Mu Changchun mentioned the three major challenges of officially launching the digital renminbi. First, improve terminal construction. Although the current digital renminbi pilot project has been operating very smoothly, the construction of the system’s use environment is still on the way.
Second, improve the safety and risk management mechanism. Throughout the entire life cycle of the digital renminbi, we will always ensure the security management of the operating system, including encryption algorithms, financial information security, data security, and business continuity to ensure system security and stability.
Third, it is necessary to clarify the regulatory framework. The newly released “Law of the People’s Republic of China on the People’s Bank of China (Revised Draft for Solicitation of Comments)” has included both physical cash and digital RMB. On the basis of updating the original laws and regulations, the digital renminbi also needs to establish separate regulatory measures and management methods to supplement it.
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