Sheng Songcheng: Blockchain must not be integrated with currency
Some people have summarized that so the most application that blockchain technology has brought to the market is the so-called “brainstorming”. International seminars have been held hundreds of times. However, regardless of how the market preached about “blockchain+”, Sheng Songcheng, counselor of PBoC, has always been highly skeptical about the application of this technology in the financial industry. He still insists on his own opinion: blockchain must not be integrated with currency.
Sheng Songcheng’s view on the financial sector always brings significant impact. For the same reason, he is expecting to explain the so-called financial risk control innovation technology with simple logic.
“I have three views on the blockchain. First of all, blockchain cannot be combined with currency because its greatest feature is decentralization, but monetary policy is one of the major economic policies of all countries around the world. Therefore the policy must not be decentralized and should be based on the country’s monopoly on currency issuance, which cannot be subverted for a long time. Secondly, blockchain technology should not be implemented in financial industry. Judging from the current market situation, blockchain is not helpful to improve financial efficiency. Thirdly, if the blockchain is to be applied, it is better to be used in the real economy. For example, it can play a role in artistic and archeological identification for its tamper-proof feature. “
“From the history of human technological development, real technological innovation is often questioned at the early stage. Even Einstein’s theory of relativity was no exception. But blockchain seems to have not experienced such doubts. Since the concept was introduced, blockchain has been promoted wildly. But we have not heard of any practical implmentations in any country or company. It cannot be ruled out that there is a hype component here.”
Such viewpoint was first expressed by Sheng at the Boao Forum and attracted a lot of media attention.
“In terms of efficiency of financial operations, our current payment system is already highly developed and the Internet has increased the speed of payment. In this case, with limited blocksize, blockchain is actually slow down the efficiency. Similarly, many people often say that blockchain can improve credit and prevent fraud. The actual situation is that this concept can really solve the problem of uniqueness. For example, I recorded that this bill is true, then all counterfeit bill will be denied in the future. But the uniqueness cannot prevent scams such as ezhubao. The financial risks we currently have to fight against are fund-raising frauds, excessive leverage, etc. Blockchain technology can’t help.”
Sheng Songcheng said bluntly. Compared with technical prevention and control, Sheng Songcheng believes that regulation and institutional measures are better tools against financial risk.