China To Be World Leader In Blockchain, Sets Up 'Blockchain Pilot Zone' In Hainan

China was rumored to develop the first state-backed cryptocurrency earlier this year, and in October, the country's president, Xi Jin Ping, urged for a speedier process in researching the technology behind cryptos. Now, it wants to be in the front line of it all.

CNBC reported on Sunday that the world's second-largest economy is making headway in the development of blockchain. The country already has over 500 projects registered in the Cyber Administration of China since March, and it is also setting up a blockchain pilot zone in the province of Hainan.

"China has the ability to therefore experiment around blockchain with all the upside, and very limited downside," Sebastian Markowsky, a partner at Blockchain Valley Ventures, told CNBC.

"The government has put its name behind the technology, and will continue to do so indirectly (through state-owned enterprises and private enterprises). If blockchain turns out to be the revolution that is promised, they will be able to quickly roll it out in the entirety of the country," Markowsky continued. "Otherwise, the small Hainan experiment will be shut down, leaving the rest of the country unscathed."

If blockchain is indeed the technology of the future, then China would have overtaken the U.S. not just in terms of implementation, but also in crafting policies around it. Other countries like Switzerland, Germany and the UAE seem to have more state support for blockchain compared to the U.S. that have successfully stagnated Facebook's plan of launching a digital currency off of blockchain.

But that doesn't mean that there's a complete absence of the technology in the U.S. Individual companies had pursued their blockchain ambitions too like Microsoft that started experimenting with the technology even before it propelled Bitcoin to popularity. Nike also plans to use blockchain to authenticate shoes, and this was revealed recently through a patent filed by the shoe giant.

Even Twitter CEO Jack Dorsey is building a small team to one day shift the social media company to a blockchain platform.

And finally, the largest bank in the U.S., JP Morgan, is also the leader in blockchain, with a network that has 365 banks already expressing interest in joining it, plus an additional 80 Japanese banks that, according to Bloomberg, were interested in participating as well.

There are several other companies that are working on the technology to improve their business. So in the blockchain race, no matter which country wins, one thing is for sure: blockchain is here to stay -- at least for the time being.