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Little-Known Chongqing Xiaoyudian Has More Blockchain Patents Than PayPal

The race for blockchain development is a constantly raging one, but few countries will ever manage to topple the success the burgeoning new technology has seen in China. The country has invested heavily in blockchain development both in the public and the private sector, leaving other countries way behind.

But while most of the world is focused on China’s success as a whole, few have dug deeper into the success of the particular companies pushing for blockchain development inside the country. Aside from the global tech giant Alibaba, who is the world leader in blockchain patents, few other companies are mentioned in the space.

However, the latest report from Chongqing Daily highlighted the unusual success of an unfairly overlooked company—Chongqing Xiaoyudian Microfinance. 

The company first made news at the end of July this year, when IPRdaily, a global authority on intellectual property organization, published a report ranking companies across the world according to the number of blockchain patents they had. The report, titled “The Global Enterprise Blockchain Patent Innovation Ranking in the First Half of 2020,” was published with the help of the incoPat Innovation Index Research Center and included a list of 100 companies.

Chongqing Xiaoyudian Microfinance, the only company on the list coming from China’s central megacity, ranked 66th with 14 blockchain patent applications.

While this number might not seem that high when compared to Alibaba’s 1,500, it is drastically higher than some of the other leading global corporations—Japan’s largest telecommunications service provider NTT and payments giant PayPal ranked way below Chongqing Xiaoyudian.

According to Chongqing Daily, there is a very good reason why a small lending company is engaged in blockchain technology research and development.

In an interview with the outlet, the company’s chief technology officer Dr. Wang Kaining said that microfinance desperately needed a solution for its burgeoning problems. Namely, he explained that microcredit services are universal and face significant risks, with the biggest problem being establishing an effective control system over the company’s operations. The companies that manage to solve this problem will be the ones that will survive and be able to develop their services further, he explained.

For the past five years, Chongqing Xiaoyudian positioned itself as a financial technology company and committed to using top-notch technology to build an intelligent credit risk “firewall” to bring much-needed change into the world of finance. 

Dr. Wang said that their ambitious plans weren’t easy to execute. Lead by the belief that a company’s core technology can’t be bought and had to be developed in-house, Chongqing Xiaoyudian sought out to create a research and development team. However, the company soon realized that the region lacked significant AI and IT talents, and decided to take advantage of the supportive policies offered by Chongqing City and the Liangjiang new Area. 

The policies allowed the company to recruit professionals and technical talents from across the country and utilize the municipal postdoctoral research workstation approved last year to recruit and train researchers. As of September 2020, researchers account for nearly half of the company’s 300 employees, with Dr. Wang adding that around 50 million yuan was invested in R&D from 2017 to 2019 alone.

“In the short term, the high investment will not produce obvious benefits, but in the long term, it is of great value for the company to improve its research level and train talents,” he said.

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