Chinese central bankers come out as big Blockchain sceptics

Beijing bankers issue study that descries Blockchain technology as a driver of financial innovation, or offering any potential for changing existing monetary systems

Posted 13 November 2018 at 8:40am by

Reports are emerging of a pretty hard-hitting swipe at the Blockchain hype from The People’s Bank of China, the central bank of the world’s second biggest economy.

The study out of the Bank’s research department comes down on the sceptical side, shall we say, about the technology’s potential disruptive force in financial services – claiming that it won’t be a driver of financial innovation, or that it offers any potential for changing existing monetary systems.

In What Can a blockchain do and not do, the author, Xu Zhong, the group’s director, goes so far as to say Blockchain is a “utopian fantasy” and asks us to look at the big gap between what is promised by many Blockchain projects and what they actually deliver.

Zhong’s 20,000 word thesis discusses a wide range of topics in and around the technology, but always with a very sharp focus on what actually works/is practical about them.

“In addition to the low physical performance of blockchains, the shortcomings of Blockchain economic functions are also important…Crypto assets which are not issued by the government do not have legal status equivalent to fiat currencies,” for example, while it also raises the flag of possible Blockchain fraud: “Speculation, manipulation and even violations of laws and regulations are common, especially for token projects involving public offering transactions.”

The report is only in Chinese at the moment, but does have an English abstract – go to this specialist news site for a useful drill-down.