Chinese Central Bank: Commercial Banks Should Advance Blockchain Application

Technology department chief at the People’s Bank of China (PBOC) Li Wei has encouraged the country’s commercial banks to build digital finance products based on the blockchain technology, Reuters reports.

What Happened

Wei’s comments, made at a forum in Shanghai, follow a similar remark from Chinese President Xi Jinping, who said last week the country should speed up its development of the blockchain technology, according to a local media outlet.

Also, the 13th National People’s Congress in China (NPC) passed a cryptographic law on Oct. 26, a day after Jinping’s comments. The purpose of the new law is to create a friendly environment for the development of cryptography-based technologies.

“Clear guidelines and regulations are needed to evaluate commercial cryptography technologies used in the major fields related to the national interest as the current ‘loose’ system is not suitable for the industry anymore,” a draft of the new law shows.

Why It Matters

An official at the People's Bank of China said in August that the release of the country’s cryptocurrency was “close.”

In the country’s special administrative region, the Bank of China Hong Kong (BOCHK) was already processing 85% of its property valuations related to mortgage using blockchain as of April 2018, according to Rocky Cheng Chung-ngam, the general manager of information technology at BOCHK.

“In the past, banks and [real estate] appraisers had to exchange faxes and emails to produce and deliver physical certificates,” Cheng said. “Now, the process can be done on blockchain in seconds.”