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[Forwarded from China Finance Network] Pi Network Launches Mainnet in China: A Path of Negotiation Between Cooperation and Challenges

2023-12-13

Source: China Finance Network Editor: yezi

1. Introduction

In recent years, with the rapid development of blockchain technology, digital currency has gradually become a hot topic worldwide. As an emerging digital currency project, Pi Network has attracted tens of millions of users globally since its launch. However, the process of launching Pi Network’s mainnet in China has not been smooth, experiencing a series of negotiations and challenges. Pi Network’s goal is to promote financial inclusion in the digital economy by simplifying the use and promotion of cryptocurrency. Users can obtain Pi coins by clicking a button once a day and inviting others to join the network to further increase their Pi earnings.

2. Negotiation Process Between Pi Network and the Chinese Government

China is one of the largest cryptocurrency markets in the world, and Pi Network has also gained wide attention and user participation in China. However, due to issues around personal information storage and regulation, the launch of Pi Network’s mainnet in China has been closely watched.
Dr. Nicolas, founder of Pi Network, and Dr. Fan Chengdiao have visited China multiple times to negotiate with the Chinese government regarding the launch of Pi Network’s mainnet in China. All personal information submitted by Pi pioneers during Pi Network registration is stored with the official Pi Network entity in the US. The Chinese government indicated that if Chinese Pi pioneers are not under government supervision, Pi cannot launch its mainnet in China. It is also unrealistic to bypass the US government to access Pi official data.

3. Chinese Government Regulation and Pi China Mainnet Qualification Certification

To meet the Chinese government’s regulatory requirements, the Pi team has held multiple discussions with Chinese authorities and decided to establish a subsidiary in Hong Kong and develop Pi China as a dedicated app for the Chinese market. At the same time, to ensure that Pi pioneers’ personal information is stored in the Pi Hong Kong subsidiary, the Pi team introduced the concept of mainnet qualification certification. This way, Chinese Pi pioneers’ personal information can be stored at the Pi Hong Kong subsidiary, allowing the Chinese government to supervise certified Pi pioneers on Pi China. During certification, Pi pioneers need to pay 100 USDT. The team stated that the 100U paid during certification is for all Pi pioneers who complete certification on Pi China, and an account will be opened for the Pi pioneer at the Hong Kong Digital Asset Exchange Center using the personal information provided during certification. The purpose of mainnet qualification certification is to confirm that the Pi pioneer has completed certification and stored personal information at the Pi Hong Kong subsidiary. Certified Pi pioneers will quickly complete steps 1-8, and Pi will be migrated to their wallets, achieving mainnet launch for Pi in the China region.
Bitcoin and Huobi are two very important digital currency and crypto trading platforms that developed in China. However, the Chinese government has always taken a cautious regulatory approach to crypto assets and has repeatedly taken measures to restrict or ban activities related to Bitcoin and Huobi.
The following are incidents where Bitcoin and Huobi were repeatedly forced out of China:
2013: The People’s Bank of China and four other ministries released the “Notice on Preventing Bitcoin Risks,” clearly stating that Bitcoin is not legal tender and that financial institutions and payment institutions cannot engage in Bitcoin-related business, warning the public to invest cautiously.
2017: The Chinese government introduced a series of measures, including suspending ICOs (Initial Coin Offerings), shutting down some Bitcoin exchanges, and requiring all Bitcoin exchanges to close by the end of September. This led to a sharp decline in Bitcoin trading in the Chinese market.
2017: Huobi announced it would close its trading platform and launched Huobi Pro to adapt to regulatory changes. Huobi’s headquarters moved from China to Singapore and began promoting its services globally.
2019: News emerged again in China that the country would take action to revise related laws and further clean up Bitcoin and other crypto asset trading. Platforms like Huobi came under renewed pressure and might be forced to change their operating models.
These events show the Chinese government’s attitude toward crypto assets like Bitcoin and Huobi and its regulatory rigor over related trading platforms. These events have also had a significant impact on the development of Bitcoin and Huobi in the Chinese market, so the Chinese government is very firm in its regulation of Pi Network’s mainnet launch in China.

4. Pi Pioneer Certification and Rights in Pi China

Once Pi pioneers complete certification, they can quickly finish steps 1-8 and migrate Pi to their wallets, thus enjoying the benefits of mainnet launch in Pi China. At this point, Pi pioneers can trade their Pi on the Hong Kong Digital Asset Exchange Center. Completing this step is crucial for Pi pioneers.

5. Dr. Fan Chengdiao’s Cooperation with People’s Bank of China and China UnionPay

During multiple negotiations with the Chinese government, Dr. Fan Chengdiao also established a partnership with the People’s Bank of China and China UnionPay to provide Pi pioneers with convenient trading channels. Once Pi pioneers complete steps 1-8 and Pi is migrated to their wallets, they can apply for a Pi China UnionPay card at any UnionPay-affiliated bank in China, further facilitating users’ financial transactions within the Pi Network ecosystem.
This cooperation means Pi pioneers can use their Pi coins at any bank under China UnionPay for transactions, further promoting the popularity and use of Pi.

6. Future Prospects and Challenges

Although Pi Network has made some progress in launching its mainnet in China, it still faces challenges. First, balancing government regulation with digital currencies is a major issue—ensuring compliance without stifling innovation has become an important topic. Second, the market is highly competitive, so Pi must continuously improve and innovate to stand out in the Chinese market.

7. Balancing Government Regulation and Digital Currency

For the Chinese government, regulating digital currencies is an important measure to ensure financial security and protect investors’ interests. However, overregulation should be avoided to prevent unnecessary obstacles to project development. The government needs to find a balance point that ensures effective regulation without hindering innovation and growth.

8. Conclusion

During the negotiation process for Pi Network’s mainnet launch in China, the Chinese government and the Pi team have worked together, establishing a Pi China subsidiary in Hong Kong and implementing certification to provide Chinese Pi pioneers with registration and recognition opportunities, laying a solid foundation for Pi Network’s development in China.

9. Outlook

In the future, Pi Network will continue to closely cooperate with the Chinese government to promote development and innovation in the digital currency sector. The successful mainnet launch of Pi Network in China will also provide a reference for other digital currency projects and inject new momentum into China’s digital economy.
The upcoming mainnet launch of Pi Network in China and its cooperation with the Chinese government and China UnionPay bring significant opportunities for the project’s development in the Chinese market. The Chinese government’s regulatory requirements have prompted the Pi team to establish a Hong Kong subsidiary and cooperate with China UnionPay to provide Pi pioneers with convenient trading channels. This will enable certified Chinese users on Pi Network to use Pi coins more conveniently for various transactions, promoting the adoption and expansion of Pi Network in China. As Pi Network continues to develop in China, we can look forward to more innovation and applications for Pi coins in the Chinese market.