On May 17, the government of China released its list of rankings for cryptocurrencies through its Ministry of Industry and Information Technology. This list included 28 crypto coins and the blockchains behind them.
The MIIT did not publish the methodology of its rankings, but Ethereum ranked as the highest cryptocurrency with a combined rating of 129.4 in three categories. This evaluation focused on how technologically proficient each cryptocurrency is, which platforms each offer, their applicability and their availability to users. Compared to Ethereum, Bitcoin ranked only 13th with a combined score of 88.1.
While Ethereum did not rank highest for any of the three categories, its individual scores were very high. Bitcoin only ranked high for innovation, even though it is the currency with the longest track record and the most in demand. Equally interesting is that NEO, which some have labeled “the Chinese Ethereum” ranked three below Ethereum. NEO is currently 11th in terms of market cap, well below either Bitcoin or Ethereum. The #2 ranked currency, Steem, is ranked 30th, and Lisk, Komodo, Stellar, and Cardano are #24, #58, #8, and #7 respectively.
One thing is clear, with the market prices for Bitcoin at $8334.14, Ethereum at $691.94, and Steem at $3.13, the MIIT is not basing its rankings on popularity or current demand either individually or relative to each other.
Concerned by the lack of independent analysis, the MIIT intends to re-issue their rankings on a periodic basis in order to monitor and promote global public-chain technology development and innovation. It is intended for use by governments, enterprises, and research institutes rather than traders. This is an interesting development given that China has previously taken steps to repress cryptocurrency trading in country, including blocking access to all domestic and foreign cryptocurrency exchanges and limiting electricity use to halt Bitcoin mining. It also banned Bitcoin exchanges in 2017. These actions had a considerable effect on the crypto market and the value of individual currencies earlier this year.
Despite these setbacks, more than half of the global blockchain-related patent applications came from China. Eric Zhao, an engineer with the Chinese Academy of Sciences and runs the cnLedger Twitter account, believes that the MIIT’s rankings are a sign that Chinese “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.”
While China’s motives and methodology may be opaque, one thing is clear: for cryptocurrency investors, a less hostile China is good news for the value of their investments.