China’s central bank reportedly issued regulations on the use of blockchain technology in finance less than a year after President Xi Jinping publicly encouraged more development in the area.
The People’s Bank of China (PBoC) has issued the regulations to banks and other financial institutions like securities, insurance and fund management firms, according to a «Caixin» report,(behind paywall), in an effort to shape a common standard for the industry.
Documentation about the new rules, which numbered hundreds of pages, will cover the evaluation of design, performance and the security of blockchain application to ensure stability and security, the report added, citing anonymous sources. Issues discovered during the evaluations must be classified as «severe,» «general,» or «indicative».
Blockchain Rise in China
Numerous industries and companies have started to integrate blockchain technology in their business in mainland China. According to a recent ICBC white paper, there were 420 blockchain service providers in the nation as of 2019-end, including 72 that offered 120 financial services based on the technology.
Examples of existing users in the sector include Agricultural Bank of China, which launched a blockchain-based, agriculture-related e-commerce financing system in 2017; and ICBC which in 2018 began using blockchain tech in its fund management business.
Last year, blockchain began creeping into the mainland’s mainstream after President Xi called for greater efforts to «strengthen basic research and boost innovation capacity to help China gain an edge in theories, innovation and industries of the emerging field».