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CSRC Official Comments at “Two Sessions” Conference: A Fully Decentralized Blockchain Has No Solid Ground

Zhang Ye, member of the CPPCC National Committee and director of the Information Center of the China Securities Regulatory Commission (CSRC), said at the “Two Sessions” conference that the blockchain has some very prominent characters but it cannot be fully decentralized.a447a191-5fcf-41cb-8188-c7e4a04094c1_640

Zhang Ye emphasized that both the principle of this technique and its technological means deserve high attention from Chinese government. However, there are still some issues need to be further clarification.

First of all, from a technical point of view, Zhang Ye argued that, an absolute decentralization of the blockchain is invalid: blockchain itself is a software which needs to be developed in a centralized way.

On the other hand, identity authentication is also an indispensable part of the blockchain, and the Public Key Infrastructure (PKI), is an important a centralized technique which remains feature adopted by blockchain. Therefore, to build a decentralized system based on a centralized structure, still requires further exploration.

In addition, Zhang further added that, although it is an undeniable fact that in some scenarios, a decentralized environment might be suitable. However, it’s still questionable whether all the  applications need to be decentralized.

Zhang Ye emphasized that, until now, we still haven’t found a perfect application scenario for blockchain adoption. Therefore, we should treat blockchain development more reasoningly, instead of over touted, nor conclude it as useless, follow the path of natural science develop would be better for this new tech.

the China Securities Regulatory Commission encourages the securities and futures industry to seize the historic opportunity of the global Fintech revolution. CSRC will also guide the industry body to embrace modern information technologies such as blockchain, artificial intelligence, big data and cloud computing; as well as promoting the healthy and comprehensive development of advanced fintech and the regulatory technology. They will also strengthen risk prevention and control of financial technology and regulatory technology applications, according to Zhang Ye.


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