4 June, 2018
The Central Bank of China will be using blockchain technology in its efforts to combat poverty in the Autonomous Region of Tibet—an area with currently four times the poverty rate of China. The use of blockchain will be an upgrade to their existing cloud-based system used for project management, such as fund allocation for local poverty reduction funds.
A multimode blockchain network will be established to connect multiple partners—like the Agricultural Bank of China—who are making transactions within projects.
Transparency and accountability
The Central Bank of China has praised certain aspects of blockchain, such as the inability to change data and the traceability of funds, which in turn makes partners more accountable for their spending. With this new system, they hope to have greater transparency with Tibet’s poverty reduction fund that will allow all spending to be tracked and overall bring more efficiency to the fund’s management.
The Central Bank said that they also hope to set an example for other poverty reduction projects, and cited the impoverished Gansu, Yunan, and Qinghai provinces as potential areas for future efforts.
If successful, the implications are obvious: China’s central bank could potentially set the standard for joint poverty reduction projects globally. The transparency that blockchain brings to financial transactions is essential for the management and security of funds, especially when multiple parties are involved.
Other blockchain developments in China
Though China has been critical of cryptocurrency, they have nonetheless become a global leader in global leader in blockchain patents. In 2017, Thompson Reuters reported that over half of the 406 blockchain IP applications were filed in China alone. And in April, China Money Network reported that the city of Hangzhou housed a $1.6-billion-dollar government-backed blockchain technology investment fund.
Image via Wikimedia Commons.