In more than two years since blockchain technology became a national strategy, most provinces in China have issued blockchain related development plans. In the industrial development of blockchain technology, finance has always been the main field of application.
In order to do a good job in financial standardization during the 14th Five Year Plan period, on February 8, 2022, the people’s Bank of China, the State Administration of market supervision, the China Banking and Insurance Regulatory Commission and the China Securities Regulatory Commission jointly issued the 14th five year plan for the development of financial standardization (hereinafter referred to as the plan), repeatedly mentioned the construction of financial technology standards such as blockchain, and led the standardized and healthy development of financial technology. The plan also mentioned that we should steadily promote the development of legal digital currency standards.
formulation of financial standards to improve the quality of financial technology development
Financial standards are the technical requirements that need to be unified in the financial field to provide rules and guidelines for financial activities. At present, the development of China’s financial standard system is uneven and insufficient, the market’s independent formulation of standards needs to be further standardized, the digital transformation of standards is slow, the number and capacity of professional research institutions are insufficient, and there is a shortage of compound talents.
Sun Yulin, senior researcher of Ouke cloud Chain Research Institute, told Huaxia times: “at present, there are few financial industry standards related to blockchain, and only a few industry standards and local standards can be used for reference. This just reflects that the application of blockchain in the financial industry is still in the early exploration stage, and the industry may have differences on some specific concepts and practices.”
Zhu Youping, the current chairman of the blockchain special committee of China Communications Industry Association and the author of “chain reform: blockchain thinking in China”, told the reporter of Huaxia times that the purpose of China’s clean-up of off balance sheet business of banks, local financial transactions, funds, P2P, virtual currency, and preventing the disorderly expansion of capital in Internet and other fields in the near future is also to develop finance in a standardized manner, Prevent systemic financial risks, which has laid a solid foundation for the formulation of financial standardization.
During the 13th Five Year Plan period, China has increased the supply of standards in the fields of artificial intelligence, blockchain, big data, cloud computing and mobile finance, and effectively improved the level of financial technology risk prevention.
Financial technology is an important part of financial standardization and financial modernization. The plan clearly mentions the role of blockchain technology in promoting the formulation of financial standards. The plan mentioned that the development and effective application of cloud computing, blockchain, big data, artificial intelligence, biometrics, Internet of things and other standards should be strengthened to lead the standardized and healthy development of financial technology.
The plan also focuses on improving the standards of financial infrastructure and promoting the standardization of basic elements of the financial market in the new era. Develop relevant standards for regional equity markets and other OTC market blockchain, and promote the innovation of OTC market business model.
Regional equity market is the primary form of capital market and the tower base of China’s multi-level capital market. In theory, it should develop and complement with the main board, small and medium-sized board, gem and new third board, so as to expand and extend the coverage and depth of capital market. However, in practice, there are few regional equity markets that can really play the function of capital market. Although the number of listed enterprises seems to be large, the investors involved in the transaction are limited, the actual transaction is not active, and there is even almost no transaction in most regional equity markets.
Sun Yulin believes that there is a huge imagination space for the changes that blockchain may bring to the equity market. Theoretically, blockchain can almost be reshaped and simplified, including securities issuance, trading, clearing and settlement, shareholder voting and other links, in which trading and clearing and settlement are the focus of attention. In the future, blockchain technology will have at least five practical application scenarios in the regional equity market, including connecting major financial institutions and platforms, establishing a credit investigation system for market participating intermediaries, strengthening the construction of credit information database of small, medium-sized and micro enterprises, improving the equity registration and custody function of the regional market, and promoting the connection between the regional market and the multi-level capital market system.
For the release of the plan, Zhu Youping pointed out that the plan is a large framework and guiding principle. The specific financial standardization needs to keep pace with the times and be updated dynamically. Giving full play to the role of standardization in modern financial management, financial market system, especially securities and futures, financial product and service innovation, financial digitization, preventing illegal financial business in the name of science and technology, financial opening, etc. is undoubtedly a major measure to implement the demands of innovative development and high-quality development in the financial field, And then contribute to promoting China’s development of digital economy and modernization.
“In the digital era, especially with blockchain and digital currency, financial innovation has accelerated. Blockchain is an accounting technology, and building a digital financial system with accounting as the core is the main purpose of returning to the essence of financial enabling real economy and building a new financial system in the future digital era.” Zhu Youping further said that at this stage, overseas virtual currencies such as stable currency, defi, NFT and other fast iterations, and there are also new species such as e-cny and digital collections in China; Overseas blockchain technology is also rapidly iterating from public chain, cross chain, smart contract, Dao, Web3, metauniverse, etc. domestic alliance chain is also developing rapidly. In order to adapt to the rhythm of rapid innovation, protect and even encourage innovation, standardization should not be conservative, need synchronous and rapid iteration, and version upgrading should also be updated and iterated synchronously and quickly.
promote the application of blockchain + financial innovation
The formulation of blockchain technology and application standards has been promoted in recent years. The plan mentioned that at present, China has made important breakthroughs in the two-way opening of financial standardization, and Chinese experts play a leading role in the development of international standards in the fields of blockchain, sustainable finance, mobile payment and so on.
At the beginning of 2022, 16 departments including the Secretariat Bureau of the central network information office, the general office of the people’s Bank of China and the general office of the China Banking and Insurance Regulatory Commission jointly issued a notice, announcing the list of national blockchain innovation and application pilots in 15 comprehensive and 164 characteristic fields determined by local and departmental recommendation, expert review, online publicity and other procedures.
Among them, “blockchain + trade finance”, “blockchain + cross-border finance” and “blockchain + risk control management” have promoted the innovative application of pilot fintech enterprises or units in blockchain technology. To go to each pilot unit (region), priority should be given to the use of blockchain software and hardware technologies and products with interoperability and sustainable development ability; Actively guide the development of blockchain application in the direction of value, scale and industrialization; Accelerate the formulation of relevant technology and application standards.
At present, blockchain technology has mature applications and cases in payment / cross-border payment, supply chain finance, settlement, factoring, taxation, bills, credit investigation, cross-border payment and other financial fields. In the future, it should be integrated and complementary with artificial intelligence, big data, cloud computing and other technologies to form a complete closed loop in order to release real value.
Sun Yulin introduced that using the traceability and non tamperability of blockchain, it can assist the police in combating financial crimes such as money laundering and escort the security of the financial industry and digital economy. It will be one of the important scenarios for the application of the financial industry in the future. The application of the blockchain industry of sky eye on the chain of orco cloud chain can help the police solve the problems of traceability, investigation, evidence collection and clue collection of transactions on the chain, help the police crack down on new crimes in the field of digital currency and maintain financial security.
The application of blockchain technology in the financial industry runs through the whole industry, and there have been many successful cases, but most of them are still in the stage of concept verification and are not yet mature. Sun Yulin introduced to the reporter of Huaxia times that the difficulty and challenge affecting the implementation of blockchain technology in the financial industry lies in the interconnection of data, namely “information barrier”. To play a role in blockchain technology, cross departmental, cross enterprise and cross domain data sharing is the key. We need to think about how to better make all participants in the whole financial chain willing to share data and break the “data island”. The combination of blockchain and privacy computing may provide technical feasibility for this problem.
Yuan Shuai, Deputy Secretary General of Rural Revitalization and Construction Committee of China Cultural Management Association, believes that when blockchain technology promotes financial innovation, it may be necessary to change the core mode of finance, strengthen refined financial management in technological development, and maintain the infrastructure and ledger database of financial services closely related to the life of the whole society in the process of development, Prevent technology abuse and risks. The release of the 14th five year development plan for financial standardization has important guiding and constructive significance for preventing violations in the name of science and technology.
the development of legal digital currency standard still needs further
Under the framework of the national financial standardization technical committee, six special working groups on standards, including legal digital currency, Internet finance, green finance, financial IT infrastructure, financial data and financial information technology innovation, have been established one after another, and the standardization layout in key and emerging fields has been further optimized.
The plan emphasizes promoting the development of legal digital currency standard in six aspects. Comprehensively consider the security and credibility infrastructure, issuance system and storage system, registration center, payment transaction communication module, terminal application, etc., and explore the establishment and improvement of legal digital currency infrastructure standards.
Specifically, the plan points out that we should study and formulate the information security standards of legal digital currency to ensure the storability, unforgeability, non repeated transactions and non repudiation in the process of circulation. Study and formulate legal digital currency business and application standards, and establish standardized processes for issuance, circulation and withdrawal.
The plan also emphasizes the research and formulation of statutory digital monetary standard, which helps to improve the legal security and advanced nature of legal digital money. Study and formulate the basic data element standard of legal digital currency and improve the data specification; Study and formulate technical standards for legal digital currency terminals, and promote the improvement of terminal acceptance environment; Research and formulate legal digital currency evaluation and detection standards, and standardize the detection indicators of relevant systems and products.
