China Wants Communist Party Members to Pledge Loyalty on Blockchain

Chinese President Xi Jinping's party is taking his words about the blockchain to heart. 

AccessTimeIconOct 28, 2019 at 3:28 p.m. UTC
Updated Dec 10, 2022 at 9:22 p.m. UTC

China's Communist Party (CPC) is taking its leader's support for blockchain to heart.

Following Xi Jinping's bombshell speech last week urging his countrymen to "seize the opportunity" created by the technology, the CPC released a decentralized app (dapp) for members to attest their loyalty on a blockchain.

According to a post from the CCP's propaganda office on Saturday, the dapp, in literal translation called "Original Intentions Onchain," allows members to pledge their allegiance to the party and store it on a blockchain, which can be shared and seen by others.

The term "Original Intentions" is a specific phrase mentioned by Xi during his remarks at the 19th National Congress of the CPC in 2017, after which it became a significant propaganda and educational campaign for party members to stay committed to their party.

According to the post, the technology behind the dapp was developed by a Beijing-based company called Lingzhu Technology, which says it's a blockchain developer without much detail on its tech or the team behind it.

The company's registration data shows it has received investment from state-owned capital tied to China's Tsinghua University and claims it has developed a blockchain called OF.

In fact, this company issued a little-known cryptocurrency dubbed OFCoin and got it listed on exchanges like OKEx and CoinMex early in 2018, months after China cracked down on initial coin offerings and fiat-to-crypto trading.

OFCoin's price jumped by as much as 90 percent to $0.000326 on Saturday just hours after the CPC released the dapp and said that Lingzhu Technology is behind it. As of writing, the coin has fallen by 35 percent from that peak with just a few million dollars in daily trading volume.

It's not clear if Lingzhu has conducted any public sale of the tokens. The listing profile on CoinMex states that OFCoin planned a private token sale of 20 percent of its 51.2 billion OFCoin in January 2018 at a ratio of 300,000 OFCoin to 1 ether, when the ether price was about $1,000.

The rally in OFCoin is just one ripple effect in China from Xi's speech.

Primetime news

After the Xinhua News Agency published Xi's comment Friday, Xinwen Lianbo, the country's most-watched prime-time daily news program on China Central Television (CCTV), devoted five minutes of its 30 minute broadcast to the remark.

On Saturday, the People's Daily, an official mouthpiece, published a front-page article with Xi's comment on "accelerating" blockchain development.

Though state-owned media focused on blockchain technology, the market took it as official endorsement for bitcoin. Its price jumped more than 12 percent on Friday and surged to five-week highs above $10,000, before falling back to above $9,000.

So fervent was the market response, the CCTV cautioned viewers on Saturday to calm down and not take Xi's words as endorsement for all cryptocurrency. But the market surge continued anyway.

Chinese crypto projects

There were other signs of increased blockchain and bitcoin interest in China.

 Blockchain and bitcoin search popularity on WeChat
Blockchain and bitcoin search popularity on WeChat

Searches for the terms in Chinese on Baidu, the country's biggest search engine, jumped 200 percent on Saturday, before falling back on Sunday. Similarly, searches on WeChat, China's dominant mobile messaging platform, saw strong gains following the news on Friday (see image).

And, as of writing, several major Chinese-born cryptos, including  Qtum, Vechain, Ontology, NEO, Tron and Bytom, were enjoying strong gains on Monday, ranging from 25 percent to 90 percent.

Stocks reboot

The ripple effect has gone beyond crypto, with traded stocks tied blockchain or cryptocurrency seeing even more significant growth.

In the U.S., the price of Xunlei, a cloud computing firm listed on NASDAQ, shot up by 107 percent. The Shenzhen-based company said it has developed a proprietary high-throughput distributed network based on blockchain technology.

When the market opened in mainland China on Monday, the prices of more than 100 public companies that are somewhat tied blockchain in their business operations or product offerings, all grew by 10 percent on the day (the maximum allowed).

In Hong Kong, stocks of blockchain-associated companies also saw a significant uptick. For example, LEAP Holdings and Pantronics Holdings, the two shell companies bought by the founders of OKCoin and Huobi, both saw 50 percent-plus jumps on Monday morning China time.

Chinese yuan image via Shutterstock


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