Banking Regulator Calls for Adoption of Blockchain Technology for Secondary Loans

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The China Banking Regulatory Commission has called for the expanded adoption of blockchain technology as part of efforts to spur the growth of China’s secondary loan market.

A paper on the growth and regulation of Fintech drafted by a CBRC special committee said that blockchain technology could bring pivotal benefits to the secondary loans market by improving information transparency and thus liquidity.

“As time goes on, blockchain technology will enhance the efficiency of sharing critical data such as balance sheets and foster a more liquidity secondary loan market,” said CBRC in the paper published on 19 January, which follows research conducted by committee members in France and the UK.

“Integrating this technology into our financial services platform should be part of the strategy.”

While China launched a heavy-handed crackdown on cryptocurrencies and fintech last year with a ban in initial coin offerings and the suspension of new approvals for online micro-loan companies, it’s also signalled strong support for extended use of blockchain technology across a range of sectors.

The state-owned Xinhua News Agency recently ran an editorial piece that reiterating China’s support for blockchain technology amidst a crackdown on speculation in cryptocurrencies and certain Fintech stocks.

“Regulation and handling of risk does not at all mean that we are rejecting innovation,” said Yang Dong (杨东), chair of the Fintech and Internet Security Research Centre of Renmin University (中国人民大学金融科技与互联网安全研究中心). “The current suspension of virtual currency trading platforms does not at all conflict with vigorous blockchain development.”

 

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