Thanks Cointelegraph for interviewing Anthurine, CMO of QuarkChain. We would like to share this article with everyone.
The COVID-19 pandemic is threatening to plunge the world into the deepest crisis since the Great Depression and could deprive global economies of $5.5 trillion over the next two years. China’s economy shrank for the first time in 44 years, and their gross domestic product fell by 6.8% in the first quarter compared with last year. The pandemic was, naturally, to blame. More worryingly, year-on-year retail sales fell drastically in March. Shops, offices and factories are now starting to reopen, but people remain anxious and movement is restricted.
However, businesses in Asia are currently recovering from the horrible financial hangover caused by the virus. In this report, Cointelegraph Consulting talks to some of the leading players in the blockchain industry to find out whether the surge is relevant for them or not.
Bitcoin (BTC) and other currencies have bounced up and down since the pandemic started, yet it might be white noise hiding the real change in the crypto landscape: surging interest both from the masses and governments.
The pandemic has highlighted the fragilities in the traditional financial market, so users may shift their attitudes toward cryptocurrencies. Rather than being alarmed by the crypto market, people can anticipate it. There are three main reasons for wider crypto adoption: inflation of traditional money, decrease of the interest rates of traditional assets and greater control of the levers of the economy by authorities.
As governments pump billions of dollars into their economies, inflationary pressure will grow in the next few months. For the population, it means their money will gradually depreciate. “Naturally the question arises, how do I maintain the value of my assets?” said Josh Goodbody, the director of growth and institutional business for the European and Latin America regions at Binance. He added that “people will start seeing crypto as a viable solution to this problem.”
Many governments have eased their monetary policies in response to the coronavirus crisis. Central banks have cut interest rates to zero or near-zero rates, and investors who eke out greater returns might turn to the world of crypto. “More assets will shift from low interest-bearing traditional investment vehicles to crypto ones for higher returns potential,” said Alysa Xu, the chief strategy officer of OKEx.
The need for serious government intervention in the economy is currently justified by the conditions the crisis dictates. Governments all over the world have taken control of areas that have been liberalized, from prices of specific products to the selection of industries that are allowed to continue working during quarantine. However, the reverse measures might not be that rapid. Cryptocurrencies may be a silver lining to this.
As for the authorities, the ongoing coronavirus pandemic has accelerated the development of central bank digital currencies. While cash and ATM use is plunging due to the potential infection risk factor, government stimulus packages imply cash giveaways. Looking for the alternative to cash, authorities have been reevaluating their strategies in favor of CBDCs. “Politicians in the U.S. and Europe think about how a central bank digital currency could work in practice — this is hugely encouraging for the crypto industry,” said Goodboy.
Blockchain has been a part of Chinese news coverage since October 2019, when President Xi Jinping backed the technology and set a course for the country to “seize the opportunity” presented. The virus has failed to slow this notion down, with major national initiatives regarding consortium chains and a central bank-issued digital currency continuing the enthusiasm.
One major announcement came in the form of a national blockchain network set to launch in April, as it was initially scheduled. The Blockchain-based Service Network was backed by an alliance of Chinese state-owned companies, government agencies, banks and technology companies. The BSN is expected to reduce the costs of doing blockchain-based business in China by 80%. By the end of 2020, the project may cover more than 200 cities and become an example for a global standard.
Chinese authorities are also steaming ahead with their plans to launch their own digital currency. The People’s Bank of China has already completed basic function development for a digital yuan. This past week, images of its new digital currency/electronic payment wallet leaked on social media, indicating that it has every intention of pushing the digital currency into institutional and consumer markets.
Despite the economic fallout, China has also been continuing the intellectual race. While major multinational companies including Microsoft, Walmart, Mastercard, Sony and Intel had applied for a total of 212 blockchain patents as of the end of March, their number of patents was inferior to the number from Chinese companies in 2019, and it is expected that this trend will continue. The overall number of blockchain patent applications might not exceed last year’s result of 5,800 filings, yet getting close to that figure in such a turbulent year would testify to the healthy development of the technology.
Alibaba subsidiary Ant Financial also grabbed the spotlight by announcing its new consortium chain called OpenChain. It is targeting the highly competitive consortium chain market, which includes nearly all the major tech companies in the world. Ant Financial’s platform Alipay is one of the largest mobile payment processors in the world, with a well-established offering of financial services.
Overall, the pandemic hasn’t hindered the development of the Chinese blockchain industry severely, so a quick recovery will happen easier than for other industries. However, a deeper dive into the sectors can reveal the effects and responses of businesses there.
Industry segments, blockchain platforms
The COVID-19 crisis gave platforms a strong wake up call regarding risk and budget management. For those that fail to adequately manage the situation, the threat of insolvency is a strong possibility. In early April, the public blockchain platform Factom failed to receive additional funding and was moving toward a possible liquidation of assets.
For other platforms with better-managed cash flows, the COVID-19 crisis has been less detrimental. Here’s a closer look at how QuarkChain with offices in China have managed the crisis:
QuarkChain provides an underlying technical solution for blockchains based on sharding technology. As a technology-driven company, it has managed to maintain operations while its 40 employees spread around the world have continued to work on an infrastructure that connects both consortium and public chain technology. QuarkChain’s chief marketing officer, Anthurine Xiang, reported that despite some client-side delays, it has had more time to invest in research and development.
Xiang said that following the outbreak, countries like China began to rethink how to build up more advanced infrastructure to better respond to large scale events like a public health crisis, adding: “We are providing the government with multiple project solutions for the public health system, such as blockchain solutions, resource management, and trading platforms.”
For the full article, please check: https://cointelegraph.com/news/report-on-chinas-blockchain-industry-weathering-the-storm-of-covid-19