On December 25, blockchain technology and bitcoin were reported on CCTV-2 (CCTV Finance).

Though bitcoin bulls and bears bring huge risks to the market, as a newly emergent reality, the blockchain technology adopted by bitcoin is well-suited for the financial field because of its technical features. In addition, our country has been conducting research on our own digital currency based on the blockchain technology.

Featured by decentralization, blockchain technology is a kind of Internet-based data storage technology, on which the fascinating digital currency as bitcoin is relied. Based on its traceability and automatic execution of smart contracts with other features, blockchain can greatly reduce the complexity of design and truly achieve penetrating supervision in the financial sector, especially in the bill business.

Zhang Yifeng, director of the Blockchain Institute of CBPMC (China Banknote Printing and Minting Corporation), said,

Firstly, blockchain technology uses its technical features to achieve a self-proving mechanism, so we can clearly see corresponding assets, information and data circulate on the blockchain; Secondly, the blockchain technology can simplify our existing financial processes, including the use of smart contract, which can greatly reduce transaction complexity. In the financial sector in particular, it should be noted that many financial institutions have begun to make attempts to gradually adopt blockchain technology. For example, Australian Securities Exchange is recently ready to use blockchain technology for asset and securities trading. And a group of gold traders in Europe are managing to build a new trading platform using blockchain technology.

A market participant said that in the exploration for block chain innovation and application, finance is the most essential field. According to the Chinese Bankers Survey of 2017, 72.6% of bankers believe that blockchain technology can be applied to the field of payment and settlement, 39.4% believe that it can be applied to electronic currency, and 16% suppose application in anti-money laundering, with nearly 5% for smart securities.

It is worth mentioning that the digital currency developed by our central bank pioneers the practical application of blockchain technology. With the success testing of the blockchain-based digital bill trading platform, the Central Bank-issued Digital Currency in February this year is also tested on this platform. It indicates that the central bank in China will be the first to issue digital currency and carry out real applications in a global context.

Ouyang Liangyi, vice president of Peking University’s HSBC School of Business, said,

We are still in the exploratory stage of digital currency. How to combine these new technologies with our traditional financial system and ensure our trading system safer and faster is a big task we are confronting.

The existing banking system needs a large number of mediations, since there are a large number of problems with the record keeping among banks, all of which require a great deal of back-office work and costs. Once blockchain is applied in banks, a lot of costs will be saved. And blockchain’s resistance to modification of the data will keep the data in an efficient and permanent way.