The price of the CFX token initially soared after the announcement was made Tuesday, though that rally mostly faded. CFX rose to as high as 33 cents from the weekend’s 29 cents mark, before early buyers likely took profits and pushed prices down to 30 cents as of Wednesday morning.
Conflux is a speedy and cheap blockchain that claims to be the only regulatory-compliant public blockchain in China. In the region, Conflux has collaborated with global brands and government entities on blockchain and metaverse initiatives, including the city of Shanghai, McDonald’s China and Oreos.
Conflux previously said it will build blockchain-based SIM cards in partnership with China Telecom, the second-largest wireless carrier in China with an estimated 390 million subscribers.
Despite the price surge, and numerous announcements regarding industry cooperation, on-chain data shows that transaction counts still haven’t passed highs set last fall, suggesting that the protocol hasn’t built out a sizeable userbase quite yet.
Conflux Network CTO Ming Wu told CoinDesk in March that the protocol aimed to “take the leading role to help Hong Kong and mainland China to carry out their expansions in the Web3 area.”
The first BSIM pilot program in Hong Kong is expected later this year, with plans for similar pilots in key mainland China locations such as Shanghai.
Such a backdrop has led prominent Crypto Twitter community members to start assigning Conflux the “Chinese Ethereum” label, leading to a brisk rise in valuation in the past several months.
Since the start of this year, Conflux’s market capitalization has risen from $46 million to nearly $650 million now – making CFX one of the best-performing tokens.
Some Asia-focused investors suggest Conflux’s indirect links to the Chinese market could position CFX as a proxy bet on the broader Asian market.
“Conflux Network’s partnership with state-backed telecom provider China Telecom is a clear bullish signal on the network retaining highly productive ties with influential organizations,” Jeff Mei, chief operating officer of Taiwan-based crypto exchange BTSE, told CoinDesk in a Telegram message.
“Plus, today we heard good news from Hong Kong’s SFC that retail crypto trading will be permitted under regulatory supervision. While those rules are restricted to BTC and ETH for now, this series of bullish news for the Greater China region work highly in Conflux’s favor,” Mei added.