On Monday, over 100 public fintech companies – tied or tangentially related to blockchain – soared in price at market opening as sentiment around the sector turned bullish, but perhaps too much so.

Chinese state-owned media are attempting to quell the rush into crypto stocks following President Xi’s statement to “seize the opportunity” afforded by blockchain.

State-backed agencies are publishing material meant to encourage “rational” investments, amid this surge in speculation in blockchain and fintech firms, Reuters reported Tuesday.

“Blockchain’s future is here but we must remain rational”, wrote the state-backed People’s Daily newspaper late Monday night.

Echoing a statement espoused by China Central Television this weekend, the newspaper continued:

“The rise of blockchain technology was accompanied by that of cryptocurrencies, but innovation in blockchain technology does not mean we should speculate in virtual currencies.”

Reuters also reported that the independent Shanghai Stock Exchange warned traders, “for any blockchain-related (topics), we ask listed companies to make statements based on facts and not make any exaggerated claims or create vicious hype.”

While there has been much hype, the enthusiasm followed by news of 500-plus specific enterprise blockchain projects already in motion in China and registered over the past year.

Crypto-frenzy spurred by Xi wass not limited to China. This morning, the Antigua and Barbuda-based derivatives exchange FTX announced an index fund comprised of eight China-related cryptocurrencies.

Chinese State-Owned Bank Offers Test Interface for PBoC Central Bank Digital Currency

The Agricultural Bank of China (ABC), one of the nation’s four state-owned banking giants, is trialing a test interface for the country’s central bank digital currency (CBDC).

Screenshots of an internal mobile application developed by the ABC, initially seen circulating on WeChat on Tuesday and later verified by CoinDesk, shows the banking giant has already developed a front-end interface of how users could potentially interact with China’s CBDC – also known as DE/CP.

The move hints at the acceleration of the development and deployment work of rolling out the DE/CP. CoinDesk exclusively reported last year that the People’s Bank of China had been developing the system with the involvement of the country’s four big state-owned banks as well as payments giants Ant Financial and Tencent.

The testing application, which is also available for download on iOS and Android mobile devices via a site on ABC’s domain, offers a peek into the features that will be offered through a DE/CP wallet, including paying via a QR code, receiving and sending payments and initiating transactions by touching another user’s phone.

The application also offers users a registration option. However, it appears the registration function is so far in test mode as it only allows whitelisted users to complete the registration process.

That said, the registration step shows the test is currently being carried out in four Chinese cities including Xiong’An, Suzhou, Chengdu and Shenzhen.

China’s Congress Passes Cryptography Law, Effective Jan. 1, 2020

The Standing Committee of the 13th National People’s Congress in China has passed the cryptography law on Saturday and it will be effective on January 1, 2020, according to a Chinese media report.

The announcement came one day after Chinese President Xi Jinping’s call on the country to seize opportunities in blockchain technology.

While China still bans cryptocurrency trading and its national digital currency is yet hatched, cryptography, as an integral underpinning of blockchain technology, could be key to the country’s push to be more competitive in the blockchain space.

The new law aims to tackle emerging regulatory and legal challenges in commercial cryptography use-cases as they play an increasingly important role in developing the Chinese economy, according to the law’s latest draft proposal prior to approval.

According to the proposal:

“Clear guidelines and regulations are needed to evaluate commercial cryptography technologies used in the major fields related to the national interest as the current ‘loose’ system is not suitable for the industry anymore.”

China’s national congress said the new law will encourage research and development on commercial cryptography technologies, while building up an inclusive standardized regulatory system for the market.

The Chinese congress released a draft proposal for the new law in July, soliciting public comments.

The proposal includes a range of issues from how compatible the industry standards should be with other international cryptography systems to whether companies should voluntarily verify their commercial use-cases with authorities.

According to the Chinese congress, the new law will also encourage nationwide educational efforts, such as public exhibitions, to promote cryptography among government officials, companies and social groups.

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