The topic of blockchain in the financial field has continued to heat up recently. Recently, the technical security specification for financial distributed ledger (hereinafter referred to as the specification), known as the “first blockchain standard in the domestic financial industry”, was officially released. At the same time, the blockchain research group of the digital currency Research Institute of the people’s Bank of China also wrote an article entitled “development and management of blockchain technology” to clarify the “right and wrong” and “true and false application” of blockchain. During the epidemic period, blockchain technology also played a further role in boosting enterprise financing.

At the same time, people in the industry also look forward to the launch of the central bank’s legal digital currency (DC / EP). The information previously officially disclosed by the central bank is that under the premise of adhering to double-layer operation, M0 substitution and controllable anonymity, the top-level design, standard formulation, function research and development, joint commissioning and testing of legal digital currency have been basically completed. According to the information previously disclosed by the central bank for many times, on the premise of ensuring centralized management and monetary sovereignty, the central bank does not preset a technical route in the process of promoting legal digital currency.

Blockchain technology is widely cited by many parties

The blockchain research group of the digital currency Research Institute of the people’s Bank of China recently pointed out in an article in China finance that blockchain has broad application prospects in areas with high requirements for trusted information sharing and low requirements for concurrency, such as transaction settlement, trade finance, property right transfer and so on.

In fact, in these financial scenarios, blockchain technology has been widely used by many parties, including financial regulators, banks and financial technology companies.

The trade finance blockchain platform of the people’s Bank of China, which was launched in September 2018, has now successively carried out four businesses: multi-level financing of supply chain accounts receivable, foreign payment tax filing form, rediscount fast track and international trade account supervision, and the number of connected banks and enterprises is increasing. The construction of cross-border financial blockchain service platform of safe is also becoming more and more mature. The platform was launched in March 2019. According to the data disclosed by Xuan changneng, deputy director of the State Administration of foreign exchange at the press conference, since the Spring Festival holiday, the financing and lending amount of the cross-border financial blockchain service platform has reached more than US $200 million.

JD digital launched the market’s first blockchain ABS standardized solution in June 2019 to help asset owners, plan managers, law firms, rating agencies, accounting firms, custodian banks and other ABS business participants optimize business processes and improve the efficiency of ABS issuance business. Compared with the original technical scheme, the deployment time can be reduced by 85%, and the operation and maintenance cost of each business node can be saved by more than one million every year.

It is worth noting that blockchain technology has further played a role in boosting enterprise financing in the process of helping fight the “epidemic” recently. In early February, Beijing officially launched the blockchain based supply chain creditor’s rights and debts platform, which provides evidence of account ownership based on blockchain technology, and supports small, medium-sized and micro enterprises to initiate financing needs online after obtaining the proof of ownership. In addition, financial institutions such as Zheshang Bank (4.220, – 0.03, – 0.71%) have also carried out online supply chain financial services to link the contracts between core enterprises and suppliers in the chain, effectively solving the authenticity of enterprise accounts receivable, so as to transform a large number of accounts receivable that are difficult to revitalize into blockchain accounts receivable, and realize online and efficient financing.

The standard is released to guide the more standardized development of the industry

However, while blockchain applications have accelerated in many scenarios, some related financial chaos has also emerged. Industry insiders called on the application and development of blockchain in the financial field to be further guided by supervision. At the end of February this year, the technical security specification for financial distributed ledger, known as the “first blockchain standard in the domestic financial industry”, was officially released, causing widespread concern.

The standard was officially issued by the people’s Bank of China and proposed and drafted by the digital currency Research Institute of the people’s Bank of China. The drafting institutions also include many commercial banks, blockchain research institutions and financial technology companies.

Cao Peng, vice president of JD digital, who participated in the drafting of the specification, said in an interview with the reporter of Economic Information Daily that the standardization of domestic blockchain began in 2016. For example, the white paper on China’s blockchain technology and application development (2016) proposed the framework of China’s blockchain standard system; In 2017, China Institute of electronic technology standardization released blockchain reference architecture.

“Compared with before, the specification released in 2020 mainly aims at the financial industry and puts forward higher requirements for user management, regulatory support and privacy protection of distributed ledger.” Cao Shengxi, an associate researcher at the International Monetary Research Institute of Renmin University of China, told reporters: “after the launch of the specification, the financial blockchain has a reference benchmark in architecture design, module functions, software interfaces and other aspects, and this benchmark is in the forefront of the world.”

Cao Peng said that the blockchain field has developed rapidly in recent years, but the good and bad are mixed. This time, the central bank has combined the distributed accounting technology with the financial field for the first time and formulated a comprehensive specification, which will become the “basic drawing” for building reliable blockchain technology and application, and promote the blockchain industry to bid farewell to the barbaric growth and realize more consensus and cooperation. He predicted that under the guidance of industry standards, blockchain will play a better role in finance, insurance, enterprise financing and so on.

“Before the release of the specification, there was a barbaric growth of domestic financial blockchain applications. Some applications claimed to be based on blockchain, but in fact they were not. Although some applications were based on blockchain, they were not safe in terms of security performance. After the release of the specification, we can exclude the former type of ‘fake’ blockchain projects, and we can also standardize the projects that applied blockchain technology but had security vulnerabilities.” Cao Shengxi said.

Zhou Sha, CEO of Jingtong technology and co-founder of MOAC blockchain, said that the specification led by the central bank has strong business guidance for financial institutions and financial technology companies. In the future, the regulatory authorities can also consider launching the corresponding product catalogue and list according to the technical standards to further guide the benign and standardized development of the industry.

There is no preset technical route for legal digital currency

In addition to the launch of the specification, the blockchain research group of the digital currency Institute of the people’s Bank of China recently wrote an article on “development and management of blockchain technology” in China finance. This civilization not only confirms the advantages of the unique trust transmission mechanism of blockchain, but also points out some deficiencies, and proposes to guide the healthy and orderly development of blockchain industry. According to the article, to correctly understand the applicable scenarios of blockchain technology, not all projects need blockchain, and not all data need to be linked.

The official actions in the blockchain field have attracted people’s attention frequently, and also triggered speculation in the industry that the central bank’s legal digital currency (DC / EP) may accelerate its launch. Some people believe that the epidemic is also a catalyst for the digital economy to some extent. In the “inventory of the central bank’s 2019 financial technology” released on the official wechat official account of the central bank in January, it is pointed out that under the premise of adhering to two-tier operation, M0 substitution and controllable anonymity, the top-level design, standard formulation, function research and development, joint commissioning and testing of legal digital currency have been basically completed.

What is the prospect of blockchain landing in the payment field? Will legal digital currency adopt blockchain technology? The blockchain research group of the digital currency Research Institute of the people’s Bank of China wrote that the blockchain sacrificed the system processing efficiency and some privacy of customers at the cost of synchronous storage and common computing of a large amount of redundant data, and is not suitable for high concurrency scenarios such as traditional retail payment.

The information disclosed by people from the central bank on many previous occasions is that on the premise of ensuring centralized management and monetary sovereignty, the central bank does not preset a technical route in the process of promoting legal digital currency, that is, it does not necessarily rely on a certain technical route.

At the MIT bitcoin conference recently held at MIT, some experts believe that blockchain technology is not the design choice of the central bank’s digital currency at present. Sonia Davidovich, an economist at the International Monetary Fund (IMF), said that although the distributed ledger technology can provide a variety of specific functions for the central bank’s digital currency, including transaction tracking, there are still deficiencies in protecting user privacy, interoperability with non blockchain systems (such as payment systems) and currency value transfer.

Zhou Sha said that the existing payment method based on the public chain is a completely decentralized scheme. Its advantage is that it has a decentralized trust mechanism, but its disadvantage is that the setting is complex, it can not be supervised, there is no offline payment function, the speed is slow, and it can not support the transactions of a large number of users. “The fully decentralized model cannot meet the requirements of the central bank for the concurrency of retail payment scenarios. However, some improved and hybrid blockchain like methods may meet the regulatory requirements for the centralized management of digital currency and its operation speed, efficiency and security.” He said.

Zhou Sha said that Jingtong technology is studying a scalable fast payment scheme based on blockchain. While meeting all the important functions that can be completed by existing cash, this scheme can more effectively meet the current and future demand for digital currency in the financial field.

Responsible editor: CT

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