China is pushing its research in both Artificial Intelligence and Blockchain Technology in terms of cross-border financing.
Lu Lei, Deputy Head of the State Administration of Foreign Exchange (SAFE), has commented about the matter. He said that the Chinese regulator is making plans on the use of AI and blockchain to help with cross-border financing alongside macro-prudential management. He noted that the plans are taking efforts to primarily focus on risk management applications.
SAFE’s newfound urge for innovation runs in tandem with the Chinese President, Xi Jinping’s. Recently, Xi has called for his country to embrace the use of blockchain technology, causing both technology shares and the price of Bitcoin to skyrocket.
Lu stressed the importance of risk management, stating that they need to give extra attention to fintech and digital finance’s development. He noted that when one isn’t sure of where a new form of industry is headed, one needs to focus on risk management until it’s become clear.
Lu highlighted the need for a capable financial infrastructure, stating it’s the basis of risk management. He promised to open the Chinese capital markets as well as consolidating investment channels for foreign investors.
China is making plans to reduce red tape in its financial industry. They’re developing an outbound investment scheme in Shanghai, aptly called the Qualified Domestic Limited Partnership Scheme. It will allow asset managers from outside the country to raise money within China for overseas investments. They’re studying a possible rollout for yuan interest rate options as well.
This is all the while China and the US wages a trade war. The US has started to complain about the number of barriers in a foreign company’s way, should they want to do business within the country.
China’s Big Blockchain Push
Ever since the Chinese President, Xi Jinping, made it public that he intends to lead China to embrace blockchain technology, the entire industry has seen an overall improvement. Over a dozen companies have pushed their 10% limit on rising shares, and even companies with a vague connection to blockchain have seen improvements.
Bitcoin, the cryptocurrency that started it all, rocketed up 30%, staying above the $9000 mark after going down to just under $7500 less than a week ago.
China has been developing a digital currency for the country for a while now. While there hasn’t been a release date given, it’s hard to think that Xi’s announcement came without any underlying intent. The digital RMB will probably be announced within three months’ time. How the RMB token will affect the world remains to be seen, but it will be the first of its kind.
Facebook’s Libra will launch within the first quarter of next year, with many countries being wary of the corporate-backed stablecoin. More than likely, China is pushing to launch its RMB token either before, or just after Libra.