Two of China’s largest financial services firms have agreed to work towards the development of a blockchain-based mobile payment system in what has been a busy week for China's burgeoning fintech sector and also a signal of the extent of China's blockchain ambitions.
In addition to the partnership between state-owned Bank of China (BoC) and China UnionPay (CUP), a financial services corporation that runs the country’s largest bank card services operation, $20m in research grants have been awarded to a number of universities in Hong Kong to explore the use of blockchain technology to improve security in payment systems.
Under the terms of the BoC and CUP agreement, the two institutions will jointly develop and promote the deployment of distributed ledger and big data technology within mobile payment services.
While CUP will look to build a single port for mobile services where cardholders can use a QR code to access a cloud flash payment app, BoC will work on promoting the concept of a safer and more efficient mobile payment service to Chinese consumers.
The announcement of the initiative comes shortly after a pronouncement from China’s Ministry of Industry and Information Technology (MIIT) calling for an acceleration in blockchain development efforts and proposing a number of measures designed to provide a “healthy and orderly development of the industry”.
The MIIT has also proposed extending the use of blockchain technology to other industries sucgh as supply chain management and electronic deposit services but its main focus remains the electronic payment process.
Meanwhile in neighbouring Hong Kong, authorities have awarded a $20m research grant to the Hong Kong University of Science and Technology to see how blockchain technology can be deployed to enhance the security and efficiency of existing electronic payment systems.
The university will be supported by a number of other educational institutions including the Chinese University of Hong Kong and the City University of Hong Kong.