David Pan on China’s Impact on Blockchain and Human rightsOct 20, 2020
David Pan is originally from China and moved to the United States three years ago for a masters degree in business journalism. That propelled him to becoming an international business reporter at the largest blockchain and cryptocurrency media publication, Coindesk. David's background affords him a particular perspective on the news events around the industry from China -- one of the biggest influences on blockchain and cryptocurrency.
When it comes to business, cryptocurrency and China, David has discovered that politics is also rarely far away. He revealed on the latest episode of Follow the White Rabbit podcast how his reporting unearthed a clear link between the proposal and implementation of a new national security law in Hong Kong and spikes in transactions of "stablecoins," or digital tokens pegged to a fiat currency and independent of the banking system.
Hong Kong's national security law, enacted mid-year, aims to quell opposition to China's ruling Communist Party. The law has raised widespread fears of a clampdown on free speech and tighter control over the city's financial system. Under the new law, the Hong Kong government is able to freeze and confiscate assets from people or organizations that are suspected of being involved in national security crimes.
While Hong Kong's political turmoil has seen many young people protest in the streets, David learned it was middle-aged and older people who were resorting to stablecoins in an effort to safeguard their savings. "They wanted to transfer some part of their money in case of the worst case scenario where -- if they accidentally posted (on social media) something against the government -- their money could be confiscated," David said.
People in Hong Kong use encrypted messaging services such as Telegram to work with brokers for over-the-counter trades, David said. "It's one of the ways to skirt state supervision, state surveillance and capital controls," he added.
As podcast host Alex Kehaya said, cryptocurrencies can help bring freedoms. Stablecoins effectively removed a lever for censorship where people fear one less thing that the government can take away in order to control citizens, he said.
David also explained the Chinese government's apparent contradictions where on the one hand it cracks down on cryptocurrencies but on the other seeks to be a dominant player of blockchain technology. It comes down to the difference between private, closed blockchains for uses such as managing legal documents on a distributed ledger, compared with open, public, "permissionless" blockchains that are much more prevalent in the West. The main reason for the government's posture is that the public blockchains more easily allow for cryptocurrency tokens that can be used for capital flight out of China, which would upset the Communist Party's goal to control financial stability.
David highlighted, for example, how Alibaba is set to overtake its U.S. counterparts in the race to win patents for private blockchains.
To hear more about the relation between human rights, blockchain and China, follow us down the rabbit hole: listen to the conversation here or on your favorite streaming service.