Kung Hei Fat Choi! Tomer Sofinzon, Founder and CEO of 2030 Group, discusses why he believes China is the number one country to watch for blockchain innovation in 2020; forecasts Chinese blockchain-related project registrations to double to more than 1,000 this year, and shares Group plans for a new Chinese office.
· China is the number one country to watch for blockchain innovation in 2020
· Forecast new Chinese blockchain-related project registrations to double to more than 1,000
· Considering opening a new office in China in 2020
· Blockchain is the solution to the world’s “trust” issues and can deliver real positive social impact
Kung Hei Fat Choi! On 25 January we welcome the start of a new lunar year and the year of the rat. Chinese astrologers say that rat energy is intelligent, agile and quick. That we should expect to see 2020 embody a spirit of progression, new projects and phenomenal energy.
This is welcome news and not unsurprising considering the vision and growing enthusiasm in the potential of blockchain to transform markets all over the world. For me, the year of the rat also stands for Regulation, Action and Trust. Let’s break it down.
The words regulation and governance tend to make entrepreneurs recoil. Most have come to understand, or resigned to the fact, that it needs to exist if we’re to see mainstream blockchain adoption. Particularly in highly regulated sectors like banking or pharmaceuticals. But the nimble tech industry cannot keep waiting for regulators to catch up to the previous year’s learning curve.
The nations which will emerge as global leaders in the new decentralized world are those which embrace the agile tech mentality and sharpen their regulatory focus on decentralized solutions.
In 2020, I’m closely watching many countries, with China top of the list. China’s new cryptography law came into effect a few days ago on Jan 1. Whilst China does not presently permit cryptocurrency trading and its sovereign digital currency has not yet been launched, cryptography is a key underpinning of distributed ledger technology. It is integral to China’s drive to be more competitive in the global blockchain ecosystem and improving China’s $13.4 trillion economy.
Second, the United States. I was intrigued to read over the holidays of a new ‘Cryptocurrency Act 2020’ put forward to congress. The bill has some wide-sweeping proposals that could reshape the digital asset space. The question though, remains speed of execution. With the presidential elections coming up in November, it’s possible we may see a slowdown in regulatory implementation in the US in 2020. But regardless of this, Silicon Valley tech giants will undoubtedly continue to press forward.
In Europe, I continue to closely watch Switzerland and France, who to date have led the way in regulatory openness to digital asset innovation.Regulatory harmonization across the European Union (EU) remains a perennial challenge. Valdis Dombrovskis, the EU’s financial services commissioner, said he intends to create a new regulatory framework for digital assets and digital currencies. But again, how quickly will this happen?
I’m interested to see how the UK responds once it has finally ‘exited’ the EU. Given the importance of financial services to Britain’s economy, I would expect to see accelerated digital asset reform to ensure the UK, specifically London, does not lose its position as a global financial hub.
China is top of my ‘Action’ watch list in 2020. The pace of growth, experiments and funds flowing into blockchain-focused start-ups is phenomenal. The Chinese government’s national efforts to actively spearhead the development of blockchain-powered technology so it can gain an early edge on the global playing field is already paying dividends.
More than 500 blockchain-related projects registered with the Cyberspace Administration of China in 2019. Since President Xi Jinping called for an acceleration of blockchain development in October, everybody is talking about it. Blockchain is the buzz of Beijing. I would not be shocked to see the number of new blockchain-related projects registered double to more than 1,000 in 2020.
Then there is the potential surrounding China’s intentions to release its own digital sovereign currency called DCEP (Digital Currency Electronic Payment) and a new legal framework for Security Token Offerings (STOs). The latter only being issued after the roll-out of the new national digital currency. Both extraordinarily exciting developments which we could see as early as 2020.
For 20|30 Group, we are actively exploring partnership joint venture opportunities in China as well as establishing our own local presence as we believe the brightest and bravest minds in blockchain are gravitating to China to collaborate and explore new ideas. It’s therefore logical, as a global innovation group for decentralized technologies, that we are part the newly emerging Chinese blockchain community. Specifically, our companies Mozaic Markets, MetaVault and IDWorks.
Lastly, trust. Trust is essential to society. Society cannot function without trust. Accordingly, trust in the new blockchain-based applications is vital if we’re to finally see mainstream adoption. Yet, blockchain has a trust issue. Or more specifically, ‘crypto’ has a trust issue. And sadly, the two are still often intertwined.
The irony is that blockchain is a trust mechanism. It can resolve many of the trust issues we see today, specifically in crypto; from identity authentication, process transparency, through to personal data privacy and data protection. Blockchain has the power to make a real positive impact to global society.
Championing trust and developing solutions which protect society is a key focus for 20|30 Group. Particularly OpenRelay, who have developed the first privacy-focused, open source gateway to Ethereum (known as Rivet) which aims to protect Web3 users from exploitative data mining practices.
I don’t foresee a radical image overhaul of the industry in 2020, but I would like to see blockchain participants embrace the progressive energy of the year of the rat and work together to improve societal education around the trust benefits of blockchain and distributed ledger technology. Trust needs to be earned and takes time.
One thing we can be sure of this year is, it’s going to be very exciting. Seeds are being sewn for products and services which will be mainstream by the year 2030.
Gongzhù jiànkang, xìngyùn, xinnián kuàilè!
Good health, good luck and much happiness to you all throughout the year!