It’s an interesting insight into the blockchain space in China, where technology-focused firms have had to contend with the Chinese government’s somewhat topsy-turvy attitude towards the space.
An interesting spread
Guangdong province currently accounts for the largest number of registered and operating blockchain companies in China. 25371 blockchain firms are running in the province, according to Longhash’s data visualization.
China’s north-western province of Xinjiang accounts for the second highest number of registered blockchain companies, with 5089 actively running operations.
Surprisingly China’s capital city of Beijing only accounts for 1540, which is considerably lower than many of the neighbouring provinces.
46 percent of companies involved in blockchain activities have registered capital investments of up to ¥5mln Chinese Yuan, which is equivalent to just over $700 000. 10 percent of these companies have financial backing of over ¥50mln Chinese Yuan, which is greater than $7mln.
2018 still the leader
LongHash’s data stretches back to 2009 and accounts for blockchain companies that are both registered and running.
Rewind the clock to 2009, the very year that Bitcoin came to life, and some 3911 blockchain companies were registered in China. LongHash has included companies that are actively involved in blockchain-related activities. However the listing of the companies is based on their founding year, not the year that they began blockchain-related activities.
From 2009 to 2016 there was a fairly uniform number of blockchain-based companies being registered year on year. But as the data shows things changed dramatically after 2017 and Bitcoin’s dizzying bull run towards the tail end of that year.
The number of blockchain-related businesses more than doubled from 8595 in 2017 to 18500 companies registered in 2018. This is still the highest number of companies set up since 2009.
The number of new blockchain-focused entities dropped in 2019 to just over 13000 while 2020 looks set to either match or surpass that number, with 10075 blockchain businesses registered by July.
This list has removed any companies that are no longer involved in blockchain-related business.
China’s regulatory stance
This data suggests that Chinese companies are not shy of stepping into the blockchain space, despite an historically indifferent and borderline negative stance towards the space from the Chinese government.
While the country is home to a large majority of mining operations that account for a massive portion of the overall Bitcoin mining hashrate, there have been periods of time where the use of cryptocurrencies were nearly banned.
In 2019 authorities went as far as banning access to foreign cryptocurrency exchanges, having already outlawed initial coin offerings in 2017. Chinese financial institutions are also banned from dealing with companies linked with cryptocurrency based activities.
As it stands China does not recognize Bitcoin or other cryptocurrencies as legal tender. The People’s Bank of China is actively working on its Central Bank Digital Currency which it hopes will combat the supremacy of mobile payment giants Alipay and WeChat Pay.