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New Chinese report highlights blockchain’s potential to enhance financial services

A new report from China has concluded that blockchain can enhance financial services, industry website Cointelegraph has reported.

According to the report, jointly published by China’s Academy of Information and Communications Technology and Internet giant Tencent Holdings on Tuesday, blockchain technology will further enhance “the transparency of financial transactions, strengthen the flexibility of system operation, and automate processes, thus affecting the record keeping, accounting and payment settlement methods of financial services”.

The study also notes that in addition to supporting digital currency, blockchain technology could play “a big role” in a range of fields, including payment and settlement, supply chain finance, securities trading, insurance, and credit reporting.

However, the report also notes that it is necessary to differentiate between the “coin” application and the “chain” application, advising that each requires a separate regulatory approach.

“For the ‘coin’ application, the financial risk should be strictly guarded. For the ‘chain’ application, it should be legally regulated,” the study says.

While last year China became the first country to issue a ban on initial coin offerings (ICOs) and centralised crypto trading, the Chinese authorities have remained interested in blockchain technology. In May, Li Ming, director of the Blockchain Research Office at the standards institute under the auspices of China’s IT Ministry, said that the country had launched a dedicated working group to develop national blockchain standards by the end of next year. In the same month, local media reports claimed that China's State Council had ordered the country's Guangdong Free-trade Zone to accelerate blockchain development and application. The technology’s potential has even been acknowledged by China’s president Xi Jinping.

“Ever since the start of the 21st century, a new generation of industrial revolution is substantially reshaping the global economic structure … with artificial intelligence, internet of things and blockchain constantly making application breakthroughs,” Xi said at an academic conference held also in May.

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