China to expand blockchain pilot, study FX reforms for cryptocurrency

China will expand the scope of its blockchain cross-border financing pilot platform, a senior official at the country’s foreign exchange regulator said on Tuesday.

Lu Lei, deputy head of the State Administration of Foreign Exchange (SAFE) made his remarks at a forum in Beijing, where he said the regulator will strengthen the integration of financial technology and the foreign exchange market, while maintaining a grip on supervising technology development.

“We will gradually expand the scope of the pilot and the application scenarios of blockchain technology in cross-border financing and macro prudential management,” Lu said.

“At the same time, (the government) will push forward a prospective study on foreign exchange reforms to deal with cryptocurrency and explore the construction of the foreign exchange regulation and technology system under the new situation.”

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Lu added that the SAFE’s cross-border financing blockchain platform is currently the only one registered by a central state agency at the Cyberspace Administration of China.

The platform, first launched in March, has expanded to 19 provinces and cities in November from nine, according to Global Times, a newspaper published by the official People’s Daily.

China has studied the application of blockchain and artificial intelligence in cross-border financing with a focus on risk management, and will further liberalise its capital markets.

Blockchain has attracted a lot of attention in the past few months after Chinese President Xi Jinping said China should accelerate the development of blockchain technology, a digital ledger that forms the backbone of many cryptocurrencies such as bitcoin.

Xi’s remarks sparked a rush into the shares of firms engaged in, or believed to be engaged in blockchain or digital currency-related businesses.