China is at the cutting edge of financial technology

Business & Technology

Top business and technology news for February 24, 2017. Part of the daily SupChina news roundup "A whirlwind set to shake up China’s banks."

  • China is developing its own digital currency / Bloomberg
    China’s central bank, the People’s Bank of China (PBOC), has begun testing a cryptocurrency similar to bitcoin that has been in development since 2014. Bloomberg sees the project partly as a reaction to the popularity of bitcoin and digital payment services such as Alipay and WeChat, which pose “a challenge to the PBOC’s status as the central bank of both the digital and physical realms.” At the same time, regulators are increasingly determined to exert control in various ways over both digital payments and bitcoin trading. At least when it comes to cryptocurrencies, some believe the state’s influence has limits: In December last year, one entrepreneur told SupChina that he believes “bitcoin has outgrown the stage where a single government can profoundly affect its development.”
  • In fintech, China shows the way / The Economist (paywall)
    China has several thousand peer-to-peer (P2P) platforms that allow internet users to lend to companies and people, near-ubiquitous use of mobile payment systems, and a growing array of digital financial services for investment. Last year, Chinese companies took four of the top five positions on a ranking of the “world’s most innovative fintech firms.” So it’s no surprise that the Economist says China is the “world’s leader in fintech,” or financial technology. The breakneck speed of development is a constant challenge for China’s regulators — today, for example, Caixin reported that P2P loan platforms are “now required to appoint commercial banks as fund custodians.”