China Creates a “Blockchain Test Zone” to Setup a Free Trade Zone in Hainan

The Blockchain Test Zone’s Goals

News platform China’s People.cn has reported that the country is looking into starting a “pilot area” that promotes institutional and industrial innovation, tests economic reforms, and fosters the development of a new IT industry that may be worth billions. The area will be a specific economic zone where co-operation between governments, industry, and research institutions take place.

Early in October 2018, the Oxford University Blockchain Research Center published a statement indicating that it had reached a “strategic co-operation” agreement with Hainan Resort Software Community (RSC) to develop a blockchain research lab.

The news agency touched on the project, reporting that it will study projects in fields such as international payments, the potential for free digital ports, and e-government. Further, the report also indicated that Huobi may move its headquarters from Beijing to Hainan, which means that it could be the case that other cryptocurrency companies may finally have a safe space in the zone.

This is an interesting move, especially given that China has not been too receptive of cryptocurrency. However, this could be different because it involves blockchain technology. In April, China announced that it plans to establish the zone by 2020 in Hainan. The project is poised to include a “free port” and initiatives that phase out “traditionally fueled vehicles.” According to Reuters, a few other industries participating, including horse racing, sports lotteries, and tourism.

China is no stranger to economic zones – it has used them since the 70s to promote economic development. The country transitioned from a communist-style command economy to a less regulated one like that of today.

It could be that this new type of zone will usher in a different economic system that leads to further growth.