China's internet regulator has approved 197 companies for blockchain technology in an attempt for blockchain mass adoption. Amongst them are Baidu and Alibaba.
hina's central internet regulator, the Cyberspace Administration, has released a list of 197 companies approved to use and explore blockchain technology on March 30. In the notice published by the Cyberspace Administration, it states that no institutional or individual is allowed to use blockchain for commercial purposes.
The list of companies approved includes financial firms like China Zheshang Bank and Ping, an Insurance Company as well as a remarkable number of start-ups. Most of the approved are related to logistics, government, and medical services.
Three Chinese internet giants stood out from the list: Baidu Blockchain Engine (BBE), Alibaba Cloud Blockchain-as-a-Service (BaaS), and Tencent BaaS (TBaaS). Baidu, headquartered in Beijing, is the Chinese equivalent of Google with 2 billion active users world wide.
It is one of the largest AI and Internet technology companies in the world. Baidu's crypto project is called Super Chain.
Chief scientist at Baidu’s blockchain division Xiao Wei explains Super Chain is "compatible with the development system of Bitcoin and Ethereum," and it can "insert and remove consensus mechanisms to solve the current energy consumption problem."
Alibaba Group is a international Chinese conglomerate in e-commerce, retail, Internet and technology. It has a food-tracing system based on blockchain called Food Trust Framework.
Tmall International, a B2C platform under the Alibaba Group uses this technology to prevent counterfeit goods and strengthen consumers confidence in the products. Food Trust Framework records, verifies, and provides a public ledger on the transfer of ownership in each stage of the food process.
Alvin Liu, manger of import and export at Tmall International commented on this blockchain platform:
"Food fraud is a significant global challenge, particularly with the growing complexity of supply chains."
"In response, we have created a coordinated, world-leading and robust framework that involves stakeholders from across the supply chain to improve visibility and enhance the confidence of both consumers and merchants."
Tencent Holdings Limited is an investment holding conglomerate with hundreds of subsidiaries and stakes in over 600 companies. It is the world's largest gaming company, and one of the world's largest social media company and venture capital firms.
This 20 year old company has a market value of over $500 billion USD. Last year, Tencent integrated blockchain to prevent tax fraud in the city of Shenzhen. Together with the State Administration of Taxation in Shenzhen, they used the blockchain platform to authenticate invoices and avoid malpractices and frauds of illegal billing and taxation.
Deputy director of the Shenzhen Municipal Bureau of State Taxation, Li Wei told China Money Network:
"The digital invoice based on blockchain technology has features such as complete traceability of the whole process and non-disruptive information, which consistent with invoice logic, can effectively avoid false invoices, and improve the invoice supervision process.”
This list of selected companies was created in response to the highly unregulated market and ICOs (initial coin offerings) the country saw in the past years. To be on the list, companies must comply with the standards of the Chinese State Internet Information Office.
Although the Chinese Government is not a supporter of cryptocurrencies and even banning ICOs, it sees great opportunities in Blockchain. The goal is to provide a more controllable environment to further the development of blockchain technology according to the Global Times.
"In the last few years, the lack of regulations on cryptocurrency-related blockchain technologies did play some havoc with the market, causing losses for many investors and a huge electricity waste, especially by Bitcoin miners."
said Liu Xingliang, director of the DCCI Internet research institute in an interview with the Global Times.
"But it is undeniable that this emerging technology does have a lot of potential. I believe the government is being very cautious while trying to provide a controllable environment for companies to explore its application."
Liu lastly added "In the past, when the market was barely regulated, the technology was abused by some unruly companies, some of which were scammers, to lure small investors.
Now with the participation of big companies, legitimate research and development of the technology are now possible, and chances are now much higher for a safe future with blockchain technology."