In a recent report published by one of China’s most prominent scientific research institutes, the capability of blockchain technology to transform and revamp the traditional financial services across the world is explored in detail. Eight core conclusions are drawn from this research initiative, and the implementation of blockchain technology in different departments of the financial sector is explained.
This report explains how blockchain reforms in the financial sector are not only limited to digital currency, and this technology can find its implementations across various departments of the financial sector. These domains primarily include supply chain finance, securities trading, money payments and settlements, insurance framework and credit reporting.
Working under China’s Ministry of Industry and Information Technology, this entire research project was carried out by The Academy of Information and Communications Technology.
The report states;
In addition to digital currency, the characteristics of the blockchain can play a big role in the fields of payment and settlement, supply chain finance, securities trading, insurance, and credit reporting.
This reports suggests that blockchain technology finds its groundbreaking use in revamping and reshaping the framework currently being employed for cross-border payments and large payments as well. The transparency and security that this technology provides, can be used to modernize the insurance framework used across the finance sector.
This technology finds its application in making paper documents obsolete, providing a more secure digital framework. Another application that this technology might find in the field of finance, as suggested by the report, is in the supply chain finance domain on the industrial scale.
This report also elaborated the difference between the term “coin”, and the term “chain”. It is suggested in the report that we should be careful in differentiating the two terms when talking about the prospects of blockchain technology. As for the coin, it involves the usage of blockchain technology in the operations of cryptocurrencies, which should be strictly regulated and guarded, and its framework should be carefully observed as it has whole new plane of operation, the market is often too volatile, and a long term stability is yet to be achieved in this domain. As for the chain, this word encompasses the the underlying technology being employed in the crypto-world as of now. The blockchain technology can be employed in various departments across various industries, and can prove itself to be groundbreaking. It should be dealt with legal regulations, and should be employed to transform old and obsolete traditional frameworks to modern ones.
For the ‘coin’ application, the financial risk should be strictly guarded. For the ‘chain’ application, it should be legally regulated.
Science and Technology Daily, the official newspaper of the Ministry of Science and Technology of China, stated:
It is of great significance for China’s related industries to lead global development and promote the integration of fiat and the digital economy.
China’s interests towards the employment of blockchain technology in various aspects of the daily life have been majorly positive. During a speech, China’s president, Xi Jinping, praised the emerging blockchain technology, calling it “part of technological revolution”. Xi stated:
Since the 21st century began, global scientific and technological innovation has entered an unprecedented period of intensive activity. A new round of scientific and technological revolutions and industrial changes is reconstructing the global innovation map and reshaping the global economic structure.
Previously, China has also been spearheading an international research group for standardization of Internet of Things (IoT) framework, currently being employed in various industries across the world, and blockchain technology.
China’s interest in implementing the blockchain technology to reshape the future is clearly visible, and as evident from other movements currently being carried out in the world of blockchain, it is quite clear that blockchain finds its application in almost all the fields of the industry, and is not limited to just one. Even in the industry of finance, besides acting as the foundation for digital currency across the world, this technology also finds its usage in different departments pertaining the financial sector only.
As suggested by this report, blockchain technology is predicted to change the face of industries across the world, not just the financial sector, and should be employed across other departments as well. The stated importance of this technology is further strengthened by this statement from the Vice President of a Korean telecommunication organization, KT, Seo Young il:
Blockchain will be among the central technologies for digitalization in the ‘fourth industrial revolution’.