Blockchain applications unlikely to take hold in business sector anytime soon, say finance experts
The development of blockchain technology in China is in its infancy and its application in business is unlikely to happen in the near future, according to China UnionPay president Shi Wenchao.
Standardisation of blockchain is in the early stages in China and problems such as security and regulatory systems have yet to be solved, Shi told attendees at the Boao Forum.
“How to merge it with traditional payment methods is also a concern,” he said.
The financial technology known as blockchain represents a secure transaction ledger database that is shared by all parties participating in an established, distributed network of computers, according to global consultancy Accenture.
It records and stores every transaction or exchange of data that occurs in the network, essentially hoping to eliminate the need for a central authority.
“When we talk about finance, we are talking about using other party’s capital to fund your business,” said Li Lihui , a former Bank of China president who now heads a quasi-government taskforce on blockchain research.
“There is a need for a supervision system under the government to control the risk before the technology is applicable commercially,” said Li in the same forum during a session on digital currency.
It is impossible to see the elimination of the need for a central authority, said Li.
The fundamental technology has not been developed well, and security is also a concern , according to Li.
The People’s Bank of China in December completed a trial run of digital currencies based on blockchain technology, according to a January report by Caixin.
The report also revealed how the government plans to set up a digital payments infrastructure when it is functional and ready for deployment.
Both Li and Shi expect that it will take three to five years to see any improvement in blockchain applications.