The Central Bank of China will certificate those companies that offer payment services through blockchain technology and meet some requirements necessary for this.
The People’s Bank of China (PBoC) will use a new system to certify 11 types of financial technology hardware and software used for digital payment and blockchain services.
Recently, the PBoC alongside China’s market regulator, the State Administration for Market Regulation (SAMR), released a set of documents for the new nationwide Certification of Fintech Products (CFP) system.
In this way, China advances in its intention to adopt blockchain technology in different industries of the country. This system will help ensure that product’s manufacturers are following the mandated standards imposed by the country.
Currently, there are 11 products on the list that will receive the official certification if they managed to pass the prototype examination and on-site review.
The certificate will be valid for three years and officials of China will conduct more tests to check if the product meets the standard, so the certificate will be reviewed or renewed every three years.
The idea is that these products can be used in both front-end and bank-end development for digital payment services.
How Will it Work?
The certification system covers all the products that could be involved in digital payment technologies, including point-of-sale mobile terminals as well as security carriers and chips. The documents include definitions of fintech products that require certification and rules for its proceedings.
According to local media, authorities related with the crypto industry in China would conduct random inspections on any step of the production process. The idea is to ensure compliance whilst the certificate is valid.
Institution will have permission to stamp the certificate on their logo when they obtain this document. But the certification cannot be used to directly promote products or services.
The process has important steps and specific items. One of those items included on the list of 11 products is called Trusted Execution Environment (TEE). This is a technology that can assist in the establishment of a consortium blockchain network and also verify blockchain transactions in financial transactions use cases.
This is not the first time that an entity is trying to use blockchain to execute payments. The US technology giant company Microsoft asked for two patents in August 2018. Its intention was to use similar types of technologies (like the ones used by China) in order to improve the security and capacity of the blockchain services it offers to users.
The announcement comes just a month after the People’s Bank of China publicly denied reports about the launch of its central bank digital currency (CBDC). In this sense, last September 24th, the PBoC claimed that the financial institution needs time for research. It said there is not a specific date for the launch of CBDC.
Since October, China is accelerating the development of new financial infrastructures. Also, the President of the country, Xi Jinping, called on citizens to adopt blockchain technology faster.
This information was also reported by local media. As a consequence of the President’s statements, last October 28th, China recorded a sharp growth of interest in blockchain technology. this behavior could continue growing thanks to the recent interest of Xi Jinping in adopting this kind of technology in different projects for the country.
By María Rodríguez