China’s interest in capturing cross-border financing markets surfaced as the country is evaluating the uses of blockchain and artificial intelligence (AI) in the area, Reuters reported on Sunday.
Revealed by Lu Lei, a deputy head of the State Administration of Foreign Exchange (SAFE), the agency is focusing on risk management and aiming to liberalize its capital market with the application of the decade-old technology. In addition, the regulator is also studying the use of blockchain in macro-prudential management.
“We need to pay special attention to the rapid development of digital finance and fintech,” Lei said. “When we are not entirely certain where a (new) form of business is heading, we must pay attention to risk management.”
Facebook vs. China
The push from China came amid Facebook’s constant attempt to capture the cross-border payments market by releasing its digital currency Libra. The company, however, is facing setbacks from regulators around the world, especially from the lawmakers of the United States.
Mark Zuckerberg, the CEO of Facebook, also warned Congress in his testimony that if Facebook fails to launch Libra, China will capture the market by introducing a central bank-backed digital currency.
Meanwhile, on Saturday, the Chinese parliament passed a cryptography law to tackle emerging regulatory and legal challenges in commercial cryptography applications. The law will come into effect on January 1 next year and will pave the pay for the launch of Digital yuan.
Chinese President Xi Jinping also hinted about the country’s plan to re-embrace cryptocurrencies on a speech delivered on Friday. This boosted the crypto traders’ confidence, which resulted in a massive surge in the value of Bitcoin.
BREAKING: Chinese President Xi Jinping just publicly supported China going all-in on blockchain technology across their economy.
This will be the space race of our generation.
America has to embrace the technology, including Bitcoin, or we risk being left behind.
— Pomp 🌪 (@APompliano) October 25, 2019