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China Released First Blockchain Standard for Financial Sector

The People’s Bank of China (PBoC) has recently released the Financial Distributed Ledger Technology Security Specification (JR/T 0184—2020), which is also deemed as the first blockchain standard for the financial industry in the country.

The initiative, under the guidance of the country’s central bank or PBoC with the joint effort from a lineup of banks including Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, etc, aims to standardize the application of distributed ledger technology in the financial field and improve the information security of distributed ledger.

The standard, which applies to organizations engaged in the construction of distributed ledger systems or service providers in the financial sector, stipulates the security system of financial distributed ledger technology, involving aspects of basic hardware, basic software, cryptographic algorithm, nodes communication, ledger data, consensus protocol, smart contracts, identity management, privacy protection, compliance support, operation and maintenance requirements as well as governance mechanism.

Though some questioned that distributed ledger and blockchain are not the same (the latter is actually a type of distributed ledger), one of the standard drafters Li Bin told us that the two are basically deemed as the same thing in the country, in this sense, it could serve as the standard of financial consortium. A recent post titled Development and Management of Blockchain Technology from the country’s central bank also stated that blockchain is a new type of distributed database, also known as distributed ledger.

As many of the blockchain initiatives come from financial companies especially in the banking sector, the come out of the standard could facilitate system deployment and maintenance by financial institutions in accordance with appropriate security requirements and would accelerate the healthy development of the industry.

The standard came at a time when the country’s president Xi Jinping last October stressed the importance of stepping up research on the standardization of blockchain to increase China’s influence and rule-making power in the global arena. Xi’s remarks have since accelerated the already fast-moving blockchain industry in the country.

According to data from the World Intellectual Property Organization (WIPO), China has filed over 12,900 blockchain-related patent applications as of October 2019, accounting for 53.6% of the world’s total (24,074).

Search result from the domestic company information search engine shows that there have been 37,140 blockchain companies in the country, of which nearly 11,500 (31%) was established in the past year.

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