China plans to modernize its securities business using blockchain technology. Representatives from the country’s main stock exchanges and regulatory agencies recently convened to discuss the securities industry’s future, and they agreed that blockchain would play a key role.
The China Securities Association (SAC) hosted the event, which brought together securities regulators, including the China Securities Regulatory Commission (CSRC). Two of the world’s largest stock exchanges, Shanghai and Shenzhen, were also in attendance, with all speakers discussing how they were leveraging blockchain technology to improve efficiency, lower costs, and boost transparency.
Jiang Dongxing, deputy head of the CSRC’s Science and Technology Regulatory Bureau, urged market participants to step up their blockchain efforts, noting benefits such as creating a trust mechanism that may serve as the cornerstone for China’s securities and futures industry’s future.
According to Jiang, the CSRC stated in its 14th Five Year Plan that it would increase its efforts to develop an industry cloud platform, certificate network, industry big data warehouse, and industry blockchain public infrastructure.
He said to the audience,
- “The core function of the blockchain is to establish a trust mechanism in the network environment, and it will be a key information infrastructure for the co-governance of the securities and futures industry in the digital space after [it’s] fully digitized.”
Jiang also urged the securities industry to work together on blockchain projects. He continued that the best and quickest way to create a hierarchical, unified, interconnected, safe, and reliable industry blockchain public infrastructure is to create a hierarchical, unified, interconnected, safe, and reliable industry blockchain public infrastructure is to create a hierarchical, unified, interconnected.
The Chinese securities industry’s major companies are well advanced in their blockchain projects. For example, the Shanghai and Shenzhen stock exchanges, which combined have a market value of over $8 trillion, have been testing blockchain ideas for listings, capital management, custody, and disclosures under the supervision of the CSRC. The Hong Kong Exchange and Clearing have also investigated smart contracts for post-trade settlements.