- Huobi is the first Chinese blockchain company to create Communist party branch
- Leading private companies have party branches to remain establishment friendly
- For China blockchain is good but crypto remains evil
Huobi Group, the owners of the world’s third-largest cryptocurrency exchange by daily trading volume, has created its own Communist Party committee. Houbi becomes the first Chines blockchain company to create its own Communist party branch.
Strengthening Ties with the Politics of the Country
The South China Morning Post states that Huobi’s subsidiary, Beijing Lianhuo Information Service Co. Ltd established a Communist Party Branch on Friday, November 16, 2018, quoting a post on the Weibo microblogging site.
The Communist Party’s charter requires that any business operating in China that has at least three party members in its ranks to establish a branch that will promote the official party line. The organ has mostly been operating in state-owned companies but private firms that want to establish close ties with the government have played ball.
While Huobi’s case is the first one in the blockchain and cryptocurrency industry, leading industry players like Tencent, China’s “Google” Baidu, Xiaomi and the owner of South China Morning Post Alibaba all have established Communist Party Branches. Others that have joined the foray include startups like live-stream platform Douyu and Bike sharing company Ofo. Commenting on the development, Communist Party official in Haidan District Cao Zhou said:
“We must enhance the party’s political leadership and carry out the party’s principles and policies in private enterprises.”
As several governments around the world are looking for ways to regulate cryptocurrencies and blockchain technology, some are adopting the pro-blockchain, anti-cryptocurrency stance where China leads the way.
Crypto Remains a Taboo in China
Chinese regulators shut down fiat-to-cryptocurrency exchanges and banned Initial Coin Offerings (ICOs) in September 2017 with many fearing that the move could have had adverse effects on blockchain innovation in the country. However, one year down the line, while cryptocurrency exchanges and ICOs might have migrated to other parts of the world, the Chinese government is enhancing its plans to develop blockchain applications apart from cryptocurrencies. The president of China Xi Jinping has himself called the blockchain technology a breakthrough with former director of the Institute of Financial Sciences at China’s Ministry of Finance, saying:
“We must pay attention to blockchain — it’s an irreversible historical trend […] farsighted companies will innovate and develop blockchain according to their own business needs.”
Huobi Exchange operates from mainland Singapore and has kept most of its businesses “from venture funding to cryptocurrency mining pools”– within mainland China. It remains to be seen how the move by the company to open a Communist party branch will affect its business in general and that of the entire crypto and blockchain industry.