Author: Xiaobai Editor: Tong Translator：Kevin Yang Source: PANews
“As people from Shenzhen, first we belong to the Special economic zone, then we belong to the Greater bay area, and now we also belong to the pilot demonstration zone for socialism with Chinese characteristics.”, commented one Shenzhen resident after the seeing the news on “Opinions regarding supporting Shenzhen to build the pilot demonstration zone for socialism with Chinese characteristics” on Aug. 18th.
However, what excites people in the blockchain industry in this announcement is the part regarding the support to Shenzhen in developing innovative applications including crypto currency research and mobile payment, which is a way to enhance the link and communication with financial market as well as the mutual understanding with financial products in Hong Kong and Macao. This measure is a test run in the course of promoting the internationalization of Renminbi and also to explore innovative ways in cross-region financial regulation.
1. Many years of preparation in crypto currency research
Crypto currency research in Shenzhen dates back to 2016. In Dec. 2016, under the guidance from the Shenzhen City government, around 40 well-known financial institutions including Ping An Insurance, China Merchants Bank, WeBank and Dacheng Fund Management jointly established the China (Shenzhen) Fintech crypto currency union as well as the China (Shenzhen) Fintech research institute, both first in China. The promotion of technology R&D and market application on crypto currency in China has been explored by this marketized, internationalized and innovative mechanism of union organization and research institute.
“In Shenzhen, we will take note of People's Bank of China’s policy direction, deploy research activities in the early stage, strive for test-run projects and the qualification of test-run spot in promoting digital currency, as well as together establish the regulatory system in regards of crypto currency operation.” stated He Xiaojun, the former Director of Shenzhen Financial Service Office who now serves as the Director-General of Guangdong Financial Regulatory Bureau, during the event announcing the establishment of the said union.
Mr. He further mentioned that the Shenzhen special economic zone is the “test-run field” of the Chinese economic reform; with energetic financial innovation and a prospering high-tech industry, Shenzhen is equipped with the foundation and condition to develop crypto currency and building a global center of financial innovation.
Regarding concrete terms, the City of Shenzhen also has been encouraging colleges to establish special courses in financial technology, such as crypto currency and blockchain, so as to nurture professional talents in digital currency; furthermore, it has also been encouraging science and technology research institutions and financial institutions to expand on the R&D and application of digital currency, so as to accumulate market experience in crypto currency and blockchain technology.
In November 2016, People's Bank of China also just started the preparation work of establishing the Crypto currency institute, and it was later established in January 2017; with that, we can see that Shenzhen is catching up in a fast pace. On Jun. 25th 2018, the Shenzhen Financial Technology Corporation, which is 100% owned by the Crypto currency institute, was established, serving as a powerful national institution for crypto currency research in Shenzhen.
2. 3000+ blockchain corporations that own the 2nd biggest number of patents in China
Under policy’s support, the crypto currency and blockchain industry in Shenzhen is now leading in great distance in China.
As what PANews covered earlier in “Who is the biggest winner in blockchain patents? Shanghai no longer No.1 while PKU owns zero”, until earlier this year, the Province of Guangdong leads the country with 585 patents, and Shenzhen alone contributes 385 for Guangdong.
Shenzhen has shown its determination in heavily developing in financial technology as well as catching up with Beijing and Shanghai in the field of finance which is currently Shenzhen’s weak spot. ZhongAn, WeBank and Launch Tech located in Shenzhen own 47, 31 and 27 blockchain patents respectively, and their open-to-public patents in 2018 account for about 70% of the total.
Regarding the amount of registered companies, Shenzhen also accommodates the most blockchain corporations in China. To Aug. 18th, according to Tianyancha’s statistics, 3953 companies registered in Shenzhen cover blockchain in their operation, and 379 cover digital currency.
Nowadays, in Futian Financial CBD and Nanshan Technology Park CBD that sit on the respective sides of Shennan Boulevard, nearly all companies there are involved with blockchain-related business.
In Shenzhen’s 2019 government report, it is indicated that its development in high-tech industry has become a flagship for the whole country. Shenzhen is leading in China in the percentage of GDP in societal input in R&D as well as the number of PCT international patents application; the number of national level companies in high-tech industry also ranks No.2 in China, proving that the development of digital economy in Shenzhen is leading the way in the country.
3. Actions taken in Shenzhen regarding blockchain
In recent years, many actions have been taken in Shenzhen in the fields of blockchain and digital currency, with “blockchain electronic receipt” being one of the famous projects.
On Aug. 10th 2018, the revolving restaurant in the Guomao Building issued the first blockchain electronic receipt ever in China, with its barcode area displaying Hash function; this project was run by the Shenzhen taxation authority and approved by the State Taxation Administration. Until early August this year, around 6 million blockchain electronic receipts were issued in Shenzhen within a year, covering transaction amount of 3.9 billion RMB and 113 different industries.
In the current environment, to talk about the policy support in Shenzhen, we have to mention Hong Kong. PANews once systematically sorted out the regulatory environment in Hong Kong in regards of crypto currency(See “Hong Kong’s pathway toward crypto currency regulation in a nutshell”); being members in the Greater bay area together with Hong Kong, Shenzhen also means to devote the technology of crypto currency and blockchain in developing the Greater bay area.
On Sep. 4th 2018, the “Greater bay area trade & finance blockchain platform” was officially put into test-run in Shenzhen, with its research directions including legal digital currency. On Sep. 26th 2018, People's PCC in Shenzhen held the negotiation conference on the topic of “Assisting the Shenzhen-Hong Kong technology cooperation in the Hetao region”; in the final report raised during that conference, it is indicated that the Shenzhen side can be built into the “Greater bay area financial technology network center”, so as to encourage financial institutions to develop in the research and application of crypto currency and blockchain, which is able to reduce transaction costs of physical and electronical trade activities in the Guangdong-Hong Kong-Macao Greater bay area, as well as enhance the development of cross-region e-commerce in the Greater bay area.
Nevertheless, what’s worth mentioning is that many pyramid-selling currencies and Ponzi schemes also exist in Shenzhen, as the fruit of good policy can be used by illegal activities as their promotional gimmicks. People that are interested in the field of crypto currency also need to strictly guard against illegal fundraising.
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