Yao Qian, who currently serves as Director of the Science and Technology Supervision Bureau at the China Securities Regulatory Commission, is a respected figure in China’s blockchain technology community. He is sometimes referred to as the “China Father of Crypto” and served as the first director of the central bank digital currency (CBDC) research department at the People’s Bank of China (PBoC) from 2017 to 2018.

Even after leaving active CBDC development at People’s Bank, Yao continued to actively contribute to research and discussions regarding digital currencies. In a statement he made in May 2021, he stated that digital currencies to be issued by the state will become more “smart” and could one day run on blockchain networks such as Ethereum.

China’s own digital currency, e-Yuan, was launched on a pilot basis at the end of 2019, making it one of the first regions in the world to complete CBDC testing in real-world conditions. Shortly after launching local e-Yuan tests, People’s Bank also began cross-border CBDC pilots in 2021 in collaboration with the central banks of Hong Kong, Thailand and the United Arab Emirates.

This development was in line with Chinese President Xi Jinping aggressively promoting the adoption of blockchain technology in October 2019. While the Chinese government is trying to prevent the use of cryptocurrencies by adopting a “blockchain, not crypto” approach, it aims to benefit from the potential of blockchain technology.

However, the Chinese government’s attitude towards cryptocurrencies is quite strict. In 2021, China banned all cryptocurrency transactions within the country.

While mainland China has banned the use of cryptocurrency, Hong Kong, a special administrative region of China, has been making significant strides in the field of cryptocurrencies over the past few years. The Hong Kong Securities and Futures Commission approved the first spot Bitcoin (BTC) and Ether exchange funds (ETF) in its history on April 24. With these approvals, Hong Kong is on track to become the first region to launch spot Ether ETFs, surpassing the United States when trading in Hong Kong begins on April 30.

The results of the investigation into Yao Qian, one of China’s important names in the field of blockchain technology, are not yet known. However, this investigation once again reveals the Chinese government’s contradictory approach to cryptocurrencies and blockchain technology. While China, on the one hand, wants to benefit from the potential of blockchain technology, on the other hand, it limits the areas of use of this technology by banning crypto currencies. This situation raises questions about what policy China will follow regarding cryptocurrencies and blockchain technology in the future.