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Shanghai Targets Fintech Lead in China with Blockchain Regulation

Last Updated March 4, 2021 4:54 PM
Samburaj Das
Last Updated March 4, 2021 4:54 PM

The head of Shanghai’s Financial Service Office has called for the legal regulation of blockchain technology the city looks to take the lead in the financial technology sector in China.

Shanghai is aiming to become the leader in the blockchain technology space, according to Zheng Yang, director of the Shanghai Municipal Financial Service Office. The institution is affiliated with the municipal government and is tasked to implement the laws, regulations and required guidelines issued by China’s central government. The financial regulator’s primary mandate includes the development of Shanghai as an international financial center.

According to a report by Shanghai Daily, Yang stated:

For blockchain innovation, we call for legal regulations as the first step to facilitate growth of the sector. The local regulator would like to tie up with the financial industry and legal communities to see whether Shanghai could lead in the introduction of regulatory framework for the industry.

Accordingly, the regulator will take the necessary measures to make rules for the development and growth of the industry.

Before assuming his position as the head of Shanghai’s financial regulator, Zheng was previously the vice director in charge of foreign exchange at the Shanghai branch of the People’s Bank of China (PBOC), the country’s central bank.

The official was speaking at the launch of the opening ceremony of the China Blockchain Application Research Center, Shanghai, on Sunday. The organization was founded to realize blockchain development in a nascent but burgeoning industry with self-regulation among its many initiatives.

Shanghai could be the first city in China to regulate the blockchain industry locally.

The call for regulation in China comes amid widely-reported developments of the Chinese central bank’s plan to create and issue its own digital currency, based on blockchain technology. In November 2016, The PBOC issued a recruitment call seeking blockchain experts to aid in the development and design of the software and hardware frameworks of a digital currency.

At the turn of the year, it was revealed that the PBOC conducted a digital currency trial over a blockchain in mid-December 2016, with selected state-owned and privately-owned banks. One of the participating commercial banks included the Industrial and Commercial Bank of China, the world’s largest bank by assets.

China’s wider focus on bitcoin’s underlying innovation is further underlined with country’s mandate to support blockchain development as a part of its recently announced national Five-Year Plan.

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