China studying blockchain for cross-border financing

October 28, 2019 09:52
China will focus on risk management as it embraces digital finance and fintech. Photo: Reuters

China is studying the application of blockchain and artificial intelligence in cross-border financing with a focus on risk management, a senior foreign exchange regulator said on Sunday, Reuters reports.

The comment by Lu Lei, a deputy head of the State Administration of Foreign Exchange (SAFE), comes as Facebook’s plan for its Libra digital currency project stirs global interest in the sector. 

Lu said that amid heated discussions around Libra globally, SAFE is promoting the application of financial technology and artificial intelligence (AI) in cross-border trade finance, as well as in macro prudential management.

“We need to pay special attention to the rapid development of digital finance and fintech,” Lu told a forum in Shanghai.

“When we are not entirely certain where a (new) form of business is heading, we must pay attention to risk management.”

Facebook’s digital currency ambition is causing alarm among central banks around the world, amid concerns over its threat to the global monetary system and implications to data privacy and money laundering activities.

China’s parliament on Saturday passed a new law on cryptography, as the country gears up to launch its own digital currency. 

In other comments, Lu said China will further open up its capital markets, including bond markets, with plans to consolidate investment channels for foreign investors.

Authorities plan to reduce red tape in an outbound investment scheme in Shanghai called the Qualified Domestic Limited Partnership scheme, which allows foreign asset managers to raise money locally for overseas investment.

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