Regardless of the fact that China doesn’t have an open attitude towards bitcoin and alternative digital currencies, recent reports indicate that the Chinese government will soon start using blockchain technology to process social security payments.
As the National Council for Social Security handles around $300 billion, and is continuously increasing its budget, this could call for the biggest implementation of blockchain technology yet. Blockchain technology will allow Chinese authorities to rule out the need of a middle man, thus increasing efficiency, decreasing costs and making record keeping an easier task. So far, it seems like blockchain technology will be used to handle unemployment benefits alongside with the pensions of tens of millions of people throughout the country.
In a recent press statement, the vice chairman of the National Council for Social Security Fund mentioned that: “There’s no doubt that blockchain technology will be used in the social security system because of its valuable applications in the investment and management of social security funds.”
This decision represents a clear sign of China embracing the potential of blockchain technology. Not only this, but adapters are encouraged via numerous events, such as the one in Shanghai, which is likely to be the world’s biggest blockchain event so far. At this moment in time, there are reports that the Chinese government will also be making an announcement at the event, but no official data has been released as of this moment.
Unfortunately, China’s rising to prominence in the fintech industry has gone almost unnoticed by the media. However, fintech is mainstream in the region, and giant companies such as Ant Financial and Tencent handle more than half of all payments being carried out in China. With a population of over 1.37 billion, the two companies are fighting a true, market domination battle. To put things better into perspective, Tencent’s WePay Company managed get roughly $50 million worth of transaction fees in only a month, whereas, in a fundraising event, Ant Financial raised a total of $4.5 billion, hence breaking the record for the biggest fundraising ever carried out by a Fintech company.
Due to the lack of a consistent, and well-built banking infrastructure in certain areas of China, entrepreneurs have tried their best to fit the population’s needs by implementing new technology, parts of which are based on the blockchain technology.
While China’s position regarding blockchain is becoming clearer, the position of other financial giants remains unknown. Such as is the example of the United States, which will soon be placed under a new administration, which has yet to discuss fintech and blockchain implementation plans.
Based on everything that has been outlined so far, what do you personally think about China’s new position on blockchain technology? Let us know your thoughts in the comment section below.