China announces the Certification of Fintech products to regulate digital payments and blockchain services

The People’s Bank of China has recently announced a new verification system for digital payments and blockchain-related services. Called the Certification of Fintech Products, the system certifies 11 major financial technologies (hardware and software).  

The Initial List Of Fintech Products Has been Announced

According to the October 26^th filings of China’s central bank, the first list of fintech products that are certified for use in the development of digital payment services (both back-end and front-end) has already been announced.

The new verification system is a part of China’s plan to upgrade its financial infrastructure that includes digitalizing the national currency and capitalizing the blockchain technology, as previously stated by President Xi Jinping.

The People’s Bank of China aims at digitalizing the currency to mark its global financial leadership in the digital payment industry. It will help the central bank devise its own set of regulations and incorporate security features that work in the best interest of the country’s economy at large. With the envisioned off-line transaction ability, the bank expects the state-issued e-currency to be superior as compared to Ali Pay, WeChat Pay, or other commercial products available to the people of China.

The first list of fintech products has been crafted with great care and aims at covering a wide variety of products that are usually involved in digital payments. Such products include mobile terminals, point-of-sale, front-end software, embedded application software, and even security carriers/chips.

The Process Of Receiving A Certification Of Fintech Product (CFP)

The Central Bank of China has further added that following a meticulous on-site evaluation and prototype examination that approves the product, the manufacturer will receive a Certification of Fintech Product (CFP). The certification will be valid for three years after which the products will need to be reevaluated before certification is extended.

According to the sources, authorities will also implement a system of random, unannounced inspections during the time that the certificate is valid. This will ensure proper and consistent compliance with the regulations. While the fintech manufacturer will have the authority to display the certification with its logo, marketing or advertising a product in the name of it, will be strictly forbidden.

Trusted execution environment (TEE) is a prominent item on the central bank’s list of fintech products. The technology helps in establishing an association of blockchain network for verification and tracking of the blockchain transactions specifically when used as financial transactions.