China approves use of Blockchain in Shanghai Stock Market

The Chinese authorities grant approval to test the applications of blockchain technology in the countries' largest stock exchange in Shanghai.

By · Jul 23, 2020 . 5min read

(Photo by Kevin Lee/Bloomberg News)

According to STCN, a local Chinese news agency reported about the approval of central blockchain system project. The Shanghai Stock Exchange Center received approval from the China Securities Regulatory Commission to carry out the pilot work of blockchain construction. The Commission granted permission to do so in 5 regional equity markets, namely Beijing, Shanghai, Jiangsu, Zhejiang, and Shenzhen.

The stock exchange center has set up a central working group. They are currently working on the data structure on the chain. One of the purposes of the using blockchain is to help improve the regional equity markets in terms of serving small, medium and micro-enterprises.

Blockchain will also be used to improve private equity registration, custody, equity business, and online transactions. Similarly, they are looking at its application in terms of transforming the information disclosure documents of listed companies into data deposit certificates.

Blockchain technology will be useful in integrating all financial institutions. The purpose of this is to improve the integration of the regional market ecosystem. The regulatory authorities will keep a close eye on all the changes.

The Shanghai Stock Exchange Center is a regional equity market. The Shanghai Municipal Government approved its establishment 30 years ago. It reports to the China Securities Regulatory Commission. It provides services such as equity financing, transfer of assets, registration, custody, etc. Moreover, it has more than 10,000 companies listed on the exchange, and the total amount of financing that takes place exceeds 250 billion Yuan. The exchange is the worlds 4th largest exchange in terms of market capitalization.

This news joins a long list of developments in China that sees the country embracing blockchain technology. China will begin testing its digital Yuan after spending years researching the technology.

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