China plans to use blockchain for social security payments
China plans to utilise blockchain technology for social security funding and payments through its National Council for Social Security, which oversees a budget of nearly $300 billion and is increasing annually by 24.6 percent. The use of blockchain technology aims to minimise costs, make social security transactions more efficient and streamline record-keeping. Fintech-friendly China has shown great interest in blockchain, with Shanghai hosting the largest blockchain event in history this year. The nation’s modern outlook on internet-based banking solutions has encouraged the use of technology such as blockchain for a wide range of financial transactions.

The Chinese government is to use blockchain technology for social security payments such as unemployment benefits and pensions. According to China Daily, Wang Zhongmin, vice-chairman ...

The Chinese government is to use blockchain technology for social security payments such as unemployment benefits and pensions. According to China Daily, Wang Zhongmin, vice-chairman of the National Council for Social Security Fund states:

“There’s no doubt that blockchain technology will be used in the social security system because of its valuable applications in the investment and management of social security funds.”

The National Council for Social Security manages almost $300 billion with a budget increasing yearly by 24.6 percent. Due to blockchain’s ability to cut out middle men, they are hoping to decrease costs and increase efficiency with clearing, settlement, payments and record keeping made easier by blockchain technology.

This is the latest sign of the Chinese government embracing blockchain technology and seemingly moving towards promoting it just as Shanghai is to welcome the industry on what is likely to be the biggest blockchain event ever with household names expected to make numerous announcements.

There are indications that one such announcement may be from the Chinese government itself or consortia/alliances connected to the Chinese government but we have no concrete information.

China Rising

In what may be this decade’s biggest surprise, the Chinese are leading the world in the adoption of these new technologies. Fintech is mainstream there. Internet giants such as Tencent and Ant Financial handle more than half of all payments in China, with these two giants engaged in an epic battle for market domination.

To just indicate the scale of these two companies, Tencent’s WePay only recently stopped subsidizing almost $50 million in banking transaction fees for just the month of January while Ant Financial recently raised $4.5 billion, making it the biggest fundraising by a Fintech company.

China’s lack of any banking infrastructure as we know it in the west, combined with the invention of the internet, has allowed entrepreneurs to fill financial needs by jumping to the newest technology. QCodes are everywhere, they send money through their instant messaging apps, they chat to robo-advisors, the Chinese millennials demand their money is invested in an hour – waiting a day, let alone longer, is a no go.

USA Awaits a New Administration

In the west, UK declared the start of a beautiful friendship this spring and their regulatory environment is considered to be the best in the world for Fintech, but we have heard little from US officials. While there was some talk about streamlining regulation across the nation, the election season seems to have taken over with a new administration expected in just two months.

We have asked both Trump’s campaign and Hillary’s for their positions on blockchain tech and fintech, but we have received no response. Moreover, the positions section of the campaign website of both candidates says nothing – as far as I can see – regarding fintech or blockchain.

It’s still early days, but with just two months to go and considering blockchain tech promises billions in saving while IoT is estimated in trillions, we will probably hear more from both Trump and Hillary on their views towards these new inventions and how their administration would facilitate this wave of innovation.

Images from Shutterstock and Wikimedia.