Although there is controversy over encrypted digital currency, research and development of blockchain technology is fiercely competitive. Blockchain has become an emerging technology valued in China and abroad, and its standardization process is advancing.
On March 12, the Ministry of Industry and Information Technology (MIIT) announced that it is assembling the National Blockchain and Distributed Accounting Technology Standardization Technical Committee, aimed to carry out special research, promote the blockchain standardization system, and implement the ISO/TC307 technology.
People’s Bank of China (PBOC), the nation’s central bank, has recognized the trend of digital currency and started to advance relevance research. However, PBOC only supports and guides the application of blockchain technology, and does not accept digital currency such as Bitcoin as a retail payment tool.
Currently, nine provinces including Zhejiang, Jiangsu, Guizhou, Fujian, and Guangdong have issued guides on blockchain technology, while several have even included blockchain development in the provincial “Thirteenth Five Year Plan” that details strategic development plans.
In December of last year, the Guangzhou Development District specifically issued a government document titled “Measures for Promotion of the Blockchain Industry Development.” According to the document, blockchain companies and institutions with annual operating revenues of over five million yuan ($789,650), 20 million yuan ($3.2 million), and 100 million yuan ($15.8 million) could receive up to 500,000 yuan ($79,000), 1 million yuan ($157,930), and 5 million yuan ($789,650), respectively, in rewards and subsidies.
Applications of the blockchain technology have also emerged, such as blockchain-certified rice. On March 14, Beidahuang Agriculture (stock code: 600598.SH) announced that its blockchain-certified rice was pre-sold on JD.com on Dec. 28, 2017. However, it has not yet brought profits to the company.
Scramble for blockchain
The International Standardization Organization (ISO), International Telecommunication Union (ITU) and other internationally standardized organizations have started blockchain standardization work. China has participated in these standardization activities.
Huajie Tian, an analyst from New Times Securities, said that blockchain research conducted by MIIT can be regarded as the first ministry-level blockchain research and could further promote China’s blockchain development and implementation.
The tamper-proof feature of blockchains fundamentally differs from centralized credit by establishing credit through low-cost mathematical principles instead of at central credit institutions. Blockchain contracts are recorded by computer language rather than legal language, leading the society from personal trust and institutional trust into machine trust.
In October 2016, MIIT released the first official guidance document titled “White Paper on Blockchain Technology Application and Development in China”, which proposed a blockchain standardization process and framework for the first time. On May 16, 2017, the first Chinese blockchain standard, named “Blockchain Reference Architecture” was officially released.
China’s Electronic Technology Standardization Institute is the nation’s authority on ISO/TC 307. Fourteen companies participated in drafting the standard, including Wangxiang Blockchain, Ant Financial, WeBank and Yonyou.
In June 2017, the Thirteenth Five-Year Plan on China’s Financial Information Technology released by PBOC also proposed to strengthen the development of basic blockchain technology and its application in the finance field. According to this report, the three major institutions of PBOC in 2017 owned 68 patents related to blockchain technology, which is the highest number of blockchain-related patents held by a bank.
On March 6 this year, the European Union planned to release standards and crowdfunded legislation on blockchain, accelerating the standardization of blockchain.
Shortly thereafter, on March 9, the European Commission announced that it would launch a new mechanism to promote development of the European blockchain technology and help Europe benefit from it. The new mechanism, known as the Blockchain Observatory and Forum, oversees blockchain development. Consensys, a blockchain application developer, will work with EU officials to gather information, analyze trends, bring together experts and find new uses for the technology.
The European Commission stated that the new mechanism should play an active role in helping Europe seize new opportunities. “Blockchain technology is expected to affect digital services and change business models in areas such as healthcare, insurance, finance, energy, logistics, intellectual property management and government services,” the European Commission said. “Since 2013, we have been funding blockchain projects that will soon reach € 100 million ($ 124 million),” said Mariya Gabriel, the EU’s digital commissioner.
Blockchain application scenarios
Japanese e-commerce giant Rakuten plans to issue a new digital currency called Rakuten Coin, based on blockchain technology and the company’s existing Rakuten Super Points, to help customers buy goods and services in different markets.
Earlier, Joseph Lubin, the co-founder of the Ethereum, stated that “governments will certainly issue their own encrypted digital currency” and that “this year will be the year of application of the blockchain”.
Over the past two weeks, there have been about 30 blockchain investment and financing projects in China and abroad totaling nearly $200 million, of which nearly half are seed or angel investments.
Nearly half of the Chinese blockchain application projects are media platforms, providing blockchain-related industry information and content distribution. Other application scenarios include travel, gaming, insurance underwriting, digital currency wallets and trading platforms.
Hao Hu, another analyst from New Times Securities, said that blockchain will likely be applied first in the digital industry and content areas, such as the media industry and content areas.
In his view, the use of blockchain in media will be widely applicable, improving efficiency and reducing costs. As a new and high-impact technology, blockchain can be widely used in the fields of media industry and content copyright, such as gaming, film and TV, pictures, advertisements, and is expected to bring new changes in the production, transmission and consumption of media.