The blockchain-based 'open financial and trade ecosystem' for the Guangdong, Hong Kong, and Macau Bay Area will be run from Shenzhen. Photo: iStock
The blockchain-based 'open financial and trade ecosystem' for the Guangdong, Hong Kong, and Macau Bay Area will be run from Shenzhen. Photo: iStock

China may want to extinguish the existence of any crypto-currency-related news or information within its borders, but it is still very keen on the underlying blockchain technology.

This, crypto enthusiast might say, is like banning cars but promoting engines and wheels.

This week it was reported that the Shenzhen Central sub-branch of the People’s Bank of China, the central bank of the PRC, has officially launched the testing phase of the Bay Area Trade Finance Blockchain Platform Project.

The new system is intended to conduct trade and financing activities, including accounts receivable and trade financing, while providing a regulatory system to enable real-time monitoring of various financial activities.

This will be an “open financial and trade ecosystem based on the Guangdong, Hong Kong, and Macau Bay Area,” according to Shanghai Securities News, and will link a network of financial organizations that include China Construction Bank, China Merchants Bank, Ping An Bank, Standard Chartered Bank and BYD Co.

Locally analysts have said the benefits will include the formation of a market trust mechanism, solving financing difficulties of SMEs, assisting banks to conduct business authenticity audits, business cost reductions and improved efficiency. The platform will also reportedly help supervisory authorities to enhance regulatory tools.

Additionally, the People’s Bank of China (PBoC) Digital Currency Research Lab is expanding its efforts beyond Beijing to encourage the deployment of fintech and blockchain in real-life projects. According to local media, the lab has launched a research center in Nanjing, Jiangsu province.

These new municipal fintech labs will also operate as centers for testing the PBoC’s planned central bank digital currency when it goes from prototype to production in the future, according to the report. Nanjing’s research center comes just months after the Digital Currency Research Lab established a fully owned subsidiary in the southern city of Shenzhen.

More than 40 blockchain patent applications relating to the development of a central bank crytpto-currency have already been made and China is already a global leader in blockchain patent submissions, according to the Financial Times. Further research indicates that online commerce giant Alibaba has filed more than 10% of the world’s blockchain patent applications.

China’s increasing wrath upon digital currencies really goes against its fervor for the technology that powers most of them. The PRC, in its relentless efforts to prevent its population from achieving any degree of financial freedom, seems to want the tree but not the fruit.

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