The first government in the world to provide ratings on cryptocurrency is one that has banned its people from using it.
Today (May 17), the China Center for Information Industry Development (CCID), a research unit under the country’s industrial ministry, officially launched its monthly ratings index (link in Chinese) on 28 crypto coins and the blockchains behind them. The CCID said the index is based on three criteria, technology, application, and innovation, but didn’t publish its methodology. Ethereum is the top-ranked crypto in the first issue of its ratings, while bitcoin only came in at 13th place.
The CCID announced the initiative (link in Chinese) last week, citing the lack of an independent analysis of crypto and blockchain as a guide for governments, enterprises, and research institutes around the world. Financial ratings agencies like Weiss in the US have previously published crypto ratings, but those are more focused on trading.
China’s government has made it clear that it’s no fan of cryptocurrency because of the financial instability that comes with it, but it has welcomed the development of the underlying blockchain technology. Authorities in China banned domestic initial coin offerings (ICOs) and crypto trading in September, and subsequently cracked down on crypto mining. In the meantime, China’s central bank is among the world’s first to look into sovereign cryptocurrencies, and the nation’s tech giants are now mulling using blockchain tech in areas from supply chains to gaming. Last year, more than half of the world’s blockchain-related patent applications came from China.
Eric Zhao, a Shanghai-based engineer at the Chinese Academy of Sciences who operates the widely followed CNLedger Twitter account, said he won’t take the official crypto ratings very seriously because “most old-school experts haven’t followed the crypto space long enough to grasp some of the traits of [the] tech and community that can’t be found elsewhere.”
He added, “I believe at least it’s a sign that the officials are starting to treat crypto projects more like a neutral endeavour towards better technology and innovations, rather than just challenging the power and authority of banks and government.”