On January 23 Justin Sun presented Warren Buffett with a number of gifts at Omaha’s Happy Hollow Club. Among them was a book authored by Sun himself, a bronze horse figurine (both Sun and Buffett were born in the Year of the Horse), and a Samsung foldable phone loaded with one Bitcoin and a number of Tronix (TRX), a digital token backed by Sun’s cryptocurrency platform Tron.
As well as being a sign of gratitude, the gesture was also an apology from the 29 year-old for having so long delayed the meal he spent a jaw-dropping $4.5 million to win in a charity auction last June (see WiC456). Sun’s other goal: to change Buffett’s mind about cryptocurrency, as he brought along some of the richest whizz-kids from the crypto sector to the lunch.
But Sun’s mission seems to have failed during the gathering over steaks and Coca-Cola.
“I’m sure my grandson [who is actually seven years older than Sun] would rather inherit my wealth in US dollars [as opposed to Bitcoin],” Buffett said in response to Sun’s comment that future generations would come to appreciate cryptocurrencies more than he does. “Just because something has value doesn’t mean it’s a good investment,” added the 89 year-old, who thinks that Bitcoin is “simply a changing of hands activity”. However, the Sage of Omaha is more positive on the value of Bitcoin’s underlying technology, blockchain, which he believes will have a disruptive effect on the future of payments.
Buffett’s differing views on investing in cryptocurrency and developing blockchain technology look remarkably similar to the Chinese government’s.
Since 2017 Chinese financial regulators have been cracking down on financing activities related to virtual currencies (see WiC379).
However, in a keynote speech late last year, Chinese President Xi Jinping also endorsed the role of blockchain technology in China’s digital future, and encouraged efforts to quicken development of the sector.
Since then, a Rmb1 billion ($142.9 million) fund has been launched in the country’s first blockchain pilot zone in Hainan in December to finance companies dedicated to the technology. Over 500 blockchain projects have been registered with the Cyber Administration of China since March last year.
The flurry of activity have convinced observers that 2020 will see a huge uptake in blockchain applications in the country. Beyond financial services, it is expected to be deployed in supply chain management, copyright protection, legal contracts and energy trading.
Last year the eastern province of Zhejiang processed Rmb5 billion ($711 million) of medical bills using a blockchain platform linking 480 medical institutions. The result was a speedier process for insurance payments, which were handled 96 times faster, according to Ledger Insights, a trade publication.
More recently Fuzhou-based Hongbo said on Tuesday that it will supply blockchain technology to gaming companies operating in Cambodia with a specific focus on lottery management.
Even during the coronavirus outbreak, blockchain technology could be applied in charity projects to help reduce fraud and distribute resources in a more efficient manner, suggested the People’s Daily.
The upbeat media coverage have caused a lot of blockchain concept stocks to rally lately. Fuzhou-based Linewell Software, which supports electronic certification management with blockchain technology, saw its stock rise 48% since early February. Beijing Sinnet Technology, which helps companies to build blockchain technology, logged a 32% gain.
According to the International Data Corporation, organisations in China will plough about $2.7 billion into blockchain development by 2023. It also predicts 40% of Chinese financial institutions will shift from existing infrastructure such as SWIFT to blockchain networks for cross-border payments by 2023, and that 85% of China’s container shipping will be tracked using blockchain by 2024.
Perhaps the globalisation of the renminbi as a settlement currency – in a digital form settled with blockchain technology – is what the Chinese government is really aiming for.
© ChinTell Ltd. All rights reserved.
Exclusively sponsored by HSBC.
The Week in China website and the weekly magazine publications are owned and maintained by ChinTell Limited, Hong Kong. Neither HSBC nor any member of the HSBC group of companies ("HSBC") endorses the contents and/or is involved in selecting, creating or editing the contents of the Week in China website or the Week in China magazine. The views expressed in these publications are solely the views of ChinTell Limited and do not necessarily reflect the views or investment ideas of HSBC. No responsibility will therefore be assumed by HSBC for the contents of these publications or for the errors or omissions therein.