China to Lead the Way for Blockchain Usage

Industry experts have said that China is set to lead the way with the use of blockchain as it reinforces the development of digital intelligent services, reports the South China Morning Post.

According to the report, this development is running alongside plans by the country’s telecommunications industry as it works at rolling out 5G mobile services by 2020.

Vijay Mayadas, the vice-president of corporate strategy and head of blockchain strategy at Broadridge Financial Solutions, said to the South China Morning Post, that:

When 5G, the Internet of Things and autonomous driving start to get more prevalent then blockchain could potentially become the underlying ledger to record transactions and maintain trust in those applications.

Even though China has been slower to adopt the technology compared to other countries, it’s certainly making up for lost time. It’s doing this through its banks, which are hiring experts and developers to keep up-to-date with the technology-driven landscape.

Despite housing four of the world’s five largest banks by capital, the Chinese banking system still relies on paper and faxes. However, it is attempting to make the leap to a paperless, secure, auditable, and tamper-proof system through the blockchain as the technology gains pace.

In 2016, 86 percent of companies surveyed in China reported fraud, according to Kroll, a business intelligence firm. As the use of the blockchain gains in popularity for different use cases, Chinese regulators are beginning to see the technology as the ideal solution to stopping fraud.

Other global banks are also turning their attention to exploring blockchain to prevent fraud risk in the $4 trillion trade financing industry.

Not only that, but a survey from IBM, which looked at 200 global banks, found that 34 percent of those surveyed believed that blockchain would occur and ultimately envelop their banking services by 2020.

Digital Currency Interest

China’s boost in blockchain applications is highlighted by its increased interest in digital currency.

At the beginning of the year, the People’s Bank of China (PBOC) announced that it had completed a trial run of digital currency based on blockchain technology. According to the report, it revealed how the government plans on setting up the digital payment infrastructure when functional and ready for deployment.

Such a move clearly demonstrates the country’s commitment to staying ahead of competition and the fact that it understands the benefits that the blockchain can produce in the long-term. With its advancements, it’s set to become the global leader in the technology’s usage.

Source: Cryptocoinsnews

Unclear Regulations Troubles Hong Kong’s FinTech Sector

Experts are calling for a shake-up of FinTech regulations in China and Hong Kong as many believe that existing laws aren’t maintaining the technology’s pace.

China is widely regarded as one of the global leaders in FinTech, which is evident from its mobile payments and FinTech services such as Ant Financial, Qudian, Lufax, and ZhongAn. An October report found that it was these four financial technology firms, which had made it in the top five of the FinTech 100 report.

In a report from the South China Morning Post, it states that Ant Financial, which operates online payment platform Alipay and Tencent, which operates the WeChat Wallet make up 70 percent of the third party online payments market in China.

However, while China and Hong Kong’s innovation within FinTech has increased over the years with many turning to the sector to help them circumvent inefficiencies within the financial services, many FinTech companies would welcome better regulations to help the industry grow.

Lawrence Yu, chief executive of online financial investment platform Shulaibao, said that when rules have been set, companies have a better chance of succeeding.

He said:

Everything is fair when the rules are enforced. A clear, reasonable regulatory body would help [fintech] startups to grow.

When it comes to capital venture investment within the industry, China is leading the way after a report illustrated that funding continued to rise in 2016 as other markets experienced a slowdown in the sector. As the report found the biggest financial technology private companies by total value are those within China: Ant Financial, valued at US$60 billion and Lu.com, which is valued at US$18 billion.

Hong Kong, too, is attempting to step up its game when it comes to financial technology regulation.

Last September, the Hong Kong Monetary Authority launched its FinTech Supervisory Sandbox to enable banks to test out technologies within the sector. However, it appears that this is only available to banks and not to startups too who could greatly benefit from it.

Yet, while the Hong Kong Central Bank warned late last year that blockchain could increase the risk of money laundering, it risks the chance of falling significantly behind its competitors if it doesn’t continue to explore blockchain despite the regulatory hurdles that it faces. The financial secretary of Hong Kong, though, has pledged HKD $17 billion toward the development of a FinTech ecosystem in the country.

Despite this, however, both nations risk lagging behind other countries due to a lack of clear regulations. Singapore is one such country that is boosting its blockchain and FinTech sectors after launching its accelerator program, FinLab last summer and already poses a threat to China and Hong Kong.

Source: cryptocoinsnews

[Updated] Bitcoin Price Crashes as Chinese Exchanges OkCoin & Huobi Pause Withdrawals Temporarily

Bitcoin crashed today as OKCoin made a surprise announcement stating they are to pause BTC and LTC withdrawals for a time estimate of one month to comply with “relevant national anti-money laundering, payment and settlement of foreign exchange management and other financial laws and regulations.” Huobi made a similar announcement.

The exchanges state that in order to strictly comply with relevant laws and regulations, in a joint effort with industry counterparts, a comprehensive upgrade of the platform to effectively prevent and combat the use of Bitcoin for money laundering, foreign exchange, pyramid schemes and other illegal activities will be undertaken. In order to avoid possible illegal transactions that may continue before the system upgrade is complete, the exchanges decided:

1) Immediately from this moment, to suspend bitcoin and litecoin withdrawals;

2) RMB cash withdrawal and other operations are not affected;

3) The implementation of the system… is estimated to take 1 month, but may also be substantially ahead of that time estimate.

We have reached out to a number of exchanges, but have not yet received any response. According to unconfirmed reports, BTCC is allowing bitcoin withdrawals. They have not issued an announcement and it is currently unclear if they are taking the same measures.

There were previous reports today by western based bitcoiners that they could not withdraw from OKCoin, but those reports are not fully confirmed.

The measures follow a meeting with PBOC by nine smaller Chinese bitcoin exchanges – CHBTC, BtcTrade, HaoBTC, Yunbi, Yuanbao, BTC100, Jubi, BitBays and Dahonghuo – where they were warned to comply with laws related to money laundering, foreign currency payment and management, taxation and advertisement. In its strongest language yet, if there is a violation, PBOC may make a recommendation to the relevant authorities for the exchange to be shut down, the statement said yesterday.

The wording of PBOC is somewhat ambiguous as it is not clear whether they are warning exchanges to strictly comply from now on and if not they may even be shut down or whether it includes past violations.

Price sharply fell as of writing. Readers are however warned this story is developing. Although great care has been taken to ensure the accuracy of the above content, inadvertent mistakes may be made, thus caution is urged until further details emerge.

Bitcoin price crashes as OkCoin and Huobi pause withdrawals of Bitcoin and Litecoin. Chart courtesy: Cryptowatch.

CCN is following this developing story.

Source : cryptocoinsnews