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Blockchain technology could be the key to avoiding the next global financial crisis, according to Pang Huadong – a former vice president of North American investment banking at JPMorgan Chase. Huadong, who is currently an honorary academic advisor of the Asian Blockchain Institute, told the China Economic Times that the application of blockchain technology will naturally reduce financial risks.
This is yet another positive opinion for the cryptocurrency community, with more and more traditional investors and officials expressing their support for financial innovation.
Huadong said that at the peak of the financial crisis, back in 2008, the average daily loss was around $300 million. His experience at JPMorgan during this time has convinced him that blockchain technology could help in avoiding another such crisis.
He said that the technology can be used to build trust mechanism at very low costs. Though he believes that the development of the technology domestically is still in a very early stage, he has a very positive view for the future of blockchain development.
“Although it has experienced some relatively large fluctuations, the development prospects are limitless,” he added.
Blockchain technology is increasingly gaining popularity and recognition in China despite the government’s tough stance on cryptocurrencies. According to a report by the official newspaper of China’s Ministry of Science and Technology, the country will lead an international research group on the standardization of the Internet of Things (IoT) and blockchain technology. The group will also establish a working mechanism with international regulators to jointly promote international standardization of these technologies and the study of industrial application.
Interestingly, China’s President Xi Jinping had openly praised blockchain technology in May, saying that it was an example of new generation technologies delivering “breakthroughs”.
See also: 10 Blockchain Facts That You Must Know
China adopted a tough stance on cryptocurrencies, with the government banning all ICOs and direct trading between the Chinese yuan and digital currencies in September last year.
Following the ban, the country’s central bank has shut down 88 cryptocurrency exchanges and 85 ICO trading platforms, as reported by state-run news agency Xinhua.
These strict regulations have forced many crypto firms to move out of China and set up shop in countries that had more favourable laws. Despite the ban, the country’s represents a huge market for virtual currencies. According to Ripple CEO Brad Garlinghouse, over 50 percent of Bitcoin is controlled by China.
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