Chinese Government has approved a proposal allowing the Securities Regulatory Commission (CSRC) to encourage smart contracts and using of blockchain technology for digitally overhauling its securities market. An announcement was made by CSRC in Beijing which also notes that the process of digitization is crucial for the industry’s upcoming future.
CSRC of China wanted to digitize the country’s securities market by completely overhauling it digitally. For this purpose, CSRC placed a proposal before the Chinese Government, which proposal has now been approved by the Government. CSRC has now been tasked to encourage smart contract features in the country along with overhauling the securities market by utilizing blockchain technology.
The announcement of this project was made in an event that took place in Beijing. CSRC’s Science & Technology Bureau’s Director, Jiang Dongxing also commented on the occasion on the relevant topic. He commented that for the upcoming future of digital economy, it is essential for initiating the overhauling process from this day. The future digital transformation can only take place if the futures and securities markets are digitized now. To achieve this, CSRC requires alternative technologies for digital transformation which can only be done through blockchain, claimed Dongxing.
In China “blockchain” is a part of plan called the “Five-Year Plan”. These plans were originally developed by the political party in China i.e. Communist Party. Communist Party believes that the future of the economy is dependent upon its digitization. The party claims that there has to be a mechanism in the shape of an “alternative” that could continue to aid the national economy. Pandemics, such as Covid-19, have exposed the vulnerability of world economies that they cannot rely heavily on traditional economy boosters. The world needs an alternate source that can support the economies during times of crisis.
However, in total disregard of these declarations, China’s road to digitization is one of perturbed. At one hand, the Government is encouraging digitization but on the other hand, it is also hurting it seriously. Privately issued cryptocurrencies such as Bitcoin and others have been totally disregarded in China in the past many months. Even the mining process of Bitcoin was so badly damaged that the Chinese miners too have had to shut down their operations. They have been forced to take their mining activities somewhere else as they were neglected in their own country.
Chinese miners were producing most of the Bitcoins that landed in the global crypto market. However, most of them are closed now and the burden has shifted upon miners in other regions. Unfortunately, Bitcoin lost its momentum and the value started to decrease rapidly. Meanwhile, China successfully tested its official digital Yuan and made sure that nobody is able to compete with it. It was a strategy used for ensuring quick and efficient adoption of digital Yuan and that was why mining industry was taken down.