The People’s Bank of China, the nation’s central bank, has announced the establishment of a FinTech committee.
The PBOC has set up its own committee for ‘strengthening the research, work, planning and coordination’ of financial technologies, an announcement posted on the central bank website revealed.
China’s central bank, which also acts as the country’s financial regulator, will also organize an ‘in-depth study’ on the impact of FinTech innovation in a number of areas including monetary policy, payment and settlement and financial stability.
The PBOC has already experimented with new financial technologies. CCN has prominently covered news of the PBOC’s foray to develop its own digital currency based on blockchain technology. Having announced its plan to issue its own digital currency “as soon as possible” in early 2016, the PBOC completed a trial run of transactions settled on a blockchain with its own digital currency by the end of the year.
China is widely seen as the world’s largest [PDF] commercial FinTech market, with 40% of its 1.38 billion people using new FinTech payment technologies like Alibab’s Alipay and Tencent’s popular messaging and payments platform WeChat.
Today’s announcement, roughly translated, reads:
The People’s Bank of China has set up a financial technology FinTech committee, aimed at strengthening FinTech work in research, work, planning and coordination. Financial technology is a technology-driven financial innovation that has injected new vitality in financial development but has also brought new challenges.
On FinTech Applications and Partnerships
The People’s bank of China will organize an in-depth study on the impact of financial and technological development on monetary policy, financial markets, financial stability and payment and settlement; as well as the strategic planning and policy guidance for China’s financial and technological development. We will further strengthen the partnerships and cooperation at home and abroad, establish and improve the financial technological innovation management mechanism that is suitable for China’s national conditions, handle the relationship between safety and development, and guide the proper use of new technologies in the financial field.
The application and practice of regulatory technology (RegTech) as well as the active use of large data, artificial intelligence, cloud computing and other technologies will be used to enrich financial supervision as a means to enhance cross-industry, cross-market & cross-financial risk of screening, prevention and mitigation.
Finally, the announcement adds:
The People’s Bank of China is willing to join hands with parties to work together to promote the healthy and orderly development of China’s financial technology and to serve the real economy.
“The new committee signals a strengthened regulatory stance to caution against risks amid the rise of the FinTech sector. Regulators have to catch up when technology-driven financial innovation rises as a disruptive force to existing financial sector mechanisms,” opined Shanghai Bank of Communications senior researcher Li Ying, speaking to the South China Morning Post.
Featured image of PBOC from Shutterstock.