The People’s Bank of China (PBOC) has just issued a new set of standards for assessing the application of blockchain technology in the financial sector.
On 10 July PBOC issued the “Notice Concerning Driving the Standardised Usage of Blockchain Technology” (推动区块链技术规范应用的通知) to financial institutions in China, alongside the “Blockchain Technology Financial Application Assessment Rules “(区块链技术金融应用评估规则).
The directives contain a slew of requirements for Chinese financial institutions, including:
- Establishing sound risk prevention mechanisms for applications based on blockchain technology,
- Regularly undertaking external security assessments,
- Driving the standardised usage of blockchain technology in the financial sector.
- Undertake filing work for blockchain technology applications in accordance with regulations.
The Assessment Rules outline assessment of blockchain systems across the three areas of technical factors, functionality and security, with technical factors encompassing ten sub-areas including distributed ledger technology consensus agreements, smart contracts and node communication.
PBOC has also required that industry associations strengthen self-regulation and self-disciplinary measures for blockchain financial applications in accordance with the new directives, and establish mechanisms for self-inspection and the sharing of information.
PBOC previously issued the “Financial Distributed Ledger Technical Security Standards” (金融分布式账本技术安全规范) in March 2020, which are considered to be the Chinese financial sector’s first blockchain standards, and one of the first for global finance.
Since 2019 China has required that all blockchain systems be filed with the Cyberspace Administration of China (国家网信办), while observers point out that the new directives are amongst the first issued by the Chinese central government and will have an influence well beyond the financial sector.