Chinese City Causes Confusion with Digital Asset Exchange Proposal

A city government in China is mulling the creation of a "blockchain digital asset exchange," but no one is quite sure what it means.

Jun 15, 2018 at 8:00 a.m. UTC
Updated Sep 13, 2021 at 8:03 a.m. UTC

The municipal government of Chongqing city, China, is mulling the formation of a "blockchain digital asset exchange," but no one is quite sure what it means.

On Thursday, the Economy and Information Committee, an economic development agency that forms part of the Chongqing government executive body, published five measures the city will take to advance blockchain tech in the area.

Apart from attracting more specialized talent with additional funds, the notice said it will focus on building a blockchain ecosystem, which most notably included "establishing a blockchain digital asset exchange."

With that wording, the effort was initially anticipated by the Chinese crypto community as being a government-backed cryptocurrency exchange, and was then circulated as such among local media and on social networking platform Weibo.

Later on Thursday, however, the notice was deleted from the agency's website. The reason, as suggested by local reports, being that the central government ordered the suspension of the project as it could conflict with the existing ban on cryptocurrency trading and initial coin offerings (ICOs).

Subsequently, the Chongqing city government's official website republished the same statement early Friday morning – including mention of the "blockchain digital asset exchange."

Asked about the rumored suspension and whether the mulled move is to build a cryptocurrency trading exchange, a government official from the agency told CoinDesk they were not authorized to reveal further details.

Then, Friday, a local news source cited information from the government indicating that the digital assets may not be the same as ICO tokens or cryptocurrency. Instead, the blockchain digital asset exchange seems to be a platform that facilitates exchanges of "non-standard assets" that are digitalized through blockchain technology. As such the platform would not be open to the public, the report said.

According to a definition by China's Banking Regulatory Committee, non-standard assets refers to securities that can take the form of letters of credit, credit loans, etc. They may be exchanged among institutions, but are not tradable on a secondary stock exchange.

As previously reported by CoinDesk, several Chinese private commercial banks have already started piloting a blockchain-based system to transfer transactions of letters of credit on a consortium blockchain.

Chongqing image via Shutterstock

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