According to a new report from Reuters, China is turning to Blockchain to make markets clearer and cleaner – the regulators have been pushing banks to modernise outdated systems and processes by adopting Blockchain technology.
China’s Blockchain push is to its belief that the technology can help to reduce fraud. The nations’ Ministry of Industry and Information Technology made that determination late last year, echoing the assessments of other international regulators. Meanwhile, the Chinese central bank has become a Blockchain booster and has been actively exploring the technology’s potential benefits.
For the Chinese banking industry, Blockchain technology would not simply help to control fraud. It would also provide a way for the industry to quickly leapfrog past its current systems which often rely heavily on paper-based transactions and record-keeping. However, some observers wonder whether China’s antiquated legacy banking systems might prevent the type of rapid adoption that the government seems to prefer.
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“To be sure, many Blockchain projects globally are still in their infancy, but the complexity of Chinese bank legacy systems could make it even tougher to apply the technology successfully,” said Zennon Kapron, founder of market research firm Kapronasia.
“China is really interested in Blockchain,” said Brian Behlendorf, executive director of the Hyperledger Project, one of the biggest global blockchain projects, and a former technology adviser to the White House. “They’re looking at this as a leapfrog technology. Can you take a very backward, very paper based market, and reinvent that using blockchain?”