Hong Kong is known as being one of the world's most significant hubs for cryptocurrency development, and this is a title that the People's Republic of China would like to take. Chinese officials are not willing to wait until 2047, the year when Hong Kong is expected to be annexed by China, to claim global blockchain dominance. To this effect, the southern province of Hainan, which is geographically an island, is set to become a major competitor to Hong Kong in the near future, perhaps as early as in a few years.
Hainan is being turned into a free trade port, but it will also feature a certain degree of autonomy in terms of self-governance and administration. Since this is a new project, Chinese officials want to turn into a major showcase of blockchain development and implementation. All government platforms will operate based on blockchain networks; everything from the issuance of new ordinances to filing of building permits and from administration of utilities to revenue collection will be handled as blockchain transactions.
The idea of developing Hainan as a blokchain island dates back to 2018, when President Xi Jingping made a visit and stated the blueprint for development. It did not take long for ideas to overtake Hong Kong as a blockchain giant to emerge. Billionaire tech entrepreneur has been talking about Hainan since 2019, and he has mentioned Hong Kong as a rival to beat more than once.
Current estimates for completion of the Hainan free port indicate that operations could begin as early as the year 2025. What is interesting about Hainan is that actual cryptocurrency use and circulation has not yet been discussed. China's stance on cryptocurrency has not softened; the Communist Party is open to the idea of the yuan becoming a digital currency, but only if the blockchain can be managed by central bank regulators. Carrying out business transactions with Bitcoin is still prohibited, and the same goes for cryptocurrency trading. This prohibition does not mean that people in China do not manage digital wallets or trade cryptocurrencies; however, they do so on underground networks and with a certain level of risk.