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QINGDAO TODAY
在线翻译:
szdaily -> Business -> 
China is studying blockchain application for forex
    2019-10-28  08:53    Shenzhen Daily

CHINA is studying the application of blockchain and artificial intelligence in cross-border financing with a focus on risk management, and will further liberalize its capital markets, a senior foreign exchange regulator said yesterday.

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, the SAFE is promoting the application of financial technology and artificial intelligence 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.”

Libra will be a digital currency backed by a reserve of real-world assets, including bank deposits and short-term government securities, and held by a network of custodians. Its structure is intended to foster trust and stabilize the price.

Like other cryptocurrencies, Libra transactions will be powered and recorded by a blockchain, which is a shared ledger of transactions maintained by a network of computers.

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

China’s central bank set up a research team in 2014 to explore launching its own digital currency to cut the costs of circulating traditional paper money and boost policymakers’ control of money supply.

China’s proposed new digital currency would bear some similarities to Facebook’s Libra coin and would be able to be used across major payment platforms such as WeChat and Alipay, a senior central bank official said last month.

President Xi Jinping said last week that the country should accelerate the development of blockchain technology as a core for innovation.

Lu said that the basis of risk management is the setting up of an effective financial infrastructure, proposing that Shanghai embrace digital technology as it beefs up its systems in payment and settlement.

Lu also vowed to further open China’s capital markets, including bond markets, with plans to consolidate investment channels for foreign investors, he said.

China also plans to reduce red tape in an outbound investment program in Shanghai called the Qualified Domestic Limited Partnership program, which allows foreign asset managers to raise money locally for overseas investment, and is studying the rollout of yuan interest rate options, Lu said.

(SD-Agencies)

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