Blockchain technology should be adopted as part of a plan to boost development of China’s secondary loan market, according to a paper by the China Banking Regulatory Commission (CBRC).
Published on Jan. 19, the paper, drafted by a special committee, covers a variety of topics around developing and regulating financial technologies. In a section on the future development of China’s credit market, it suggests the country should double down its adoption of blockchain technology.
The CBRC, a major financial regulator in China under the State Council, writes in the paper:
“As the time goes on, blockchain technology will enhance the efficiency of sharing critical data such as balance sheets and foster a more liquid secondary loan market. Integrating this technology to our financial service platforms should be part of the future strategy.”
According to the paper, the new comments are the result of recent research and the committee’s visit to counterparts in the U.K and France last year. As reported by CoinDesk, several European banks have already been taking part in initiatives that use a distributed ledger platform to issue syndicated loans.
The comments also come as another example of Chinese authorities taking different stances on cryptocurrency and its underlying blockchain technology.
While speaking in favor of blockchain’s potential in fostering the loan market, CBRC is also one of the seven Chinese state agencies that jointly issued the notable ban on initial coin offering activities in September of 2017.
Elsewhere in the paper, while airing concerns that regulatory moves in China still largely fall behind the development of emerging internet technologies, the CBRC considers blockchain’s smart-contract feature as a possible solution for automating compliance reports.
China flags image via Shutterstock
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China's Banking Regulator Pushes Blockchain Adoption for Credit Market