A senior official from the Chinese central bank has called for driving the increased used of global legal entity identifiers (LEI’s) in order to better expedite the digitisation of key domestic and international financial operations.
Fan Yifei (范一飞), deputy-governor of the People’s Bank of China (PBOC), writes in a recently published article that advancing the use of LEI is a key part of China’s digital transformation ambitions as outlined in the 14th Five Year Plan as well as China’s 2035 long-term goals.
“[The 14th Five Year Plan] calls for accelerating the digital transformation of financial institutions, accelerating the transformative application of international standards, and actively participating in the drafting of international regulatory and technical standards for areas including data security, digital currency and digital taxation,” wrote Fan in an article published by PBOC’s official news publication.
“Active participation in international standardisation as represented by LEI has positive, real significance for China’s integration into the global digital economic wave and international financial regulation by means of a more open system.”
According to Fan PBOC has recently come out in strong support of LEI, which were first devised in the wake of the 2008 Global Financial Crisis (GFC) by the G20’s Financial Stability Board, with the goal of strengthening risk resilience and transparency of the international finance system.
“LEI are an ‘international legal person passport’ that are globally used, and advancing the application of LEI is of benefit to establishing a commercial environment that is adapted to international standards, expediting the sharing of factors of production in domestic and overseas markets, driving endogenous market vitality, and creating an excellent environment for overseas enterprises to undertake operations within China,” wrote Fan.
“In recent years the People’s Bank of China has focused heavily on LEI in areas including support for the development of open financial markets, expediting trade, and optimising commercial environments…it has actively participated in international LEI governance, and continually raised application standards.
“At present LEI encompasses nearly two million legal persons globally, and has already become commonly adopted in financial markets…it is expected to become a commonly used identification tool that will facilitate global trade, support compliance regulation, and expedite the growth of the digital economy.”