China aims to revolutionize credit systems with blockchain and smart contracts by 2029
The Chinese government places high priority on the security of financial information
China is planning to leverage blockchain technology to enhance the security and management of credit data.
On April 2, during a meeting of the State Council, Li Chunlin, Deputy Director of the National Development and Reform Commission (NDRC), announced the implementation of privacy computing in credit information exchange to mitigate the risk of data leaks.
"We aim to improve the financial environment for small businesses to foster growth and innovation," Li Chunlin stated.
The initiative, detailed in the "National Data Infrastructure Construction Guidelines," is set to unfold in two phases: the first phase, focusing on system architecture design, is expected to be completed by 2026, with full deployment targeted for 2029.
A key component of this infrastructure is the integration of smart contracts to automate data processing and reduce unnecessary human intervention. This system will ensure a high level of security and reliability, guaranteeing that recorded data cannot be altered.
The Chinese government is prioritizing financial information security, especially considering that outstanding loans to small enterprises reached 31.4 trillion yuan by the end of 2024, indicating significant growth in effective credit data processing. Integrating blockchain into financial systems is expected to further enhance data collection, aligning China with global leaders in this field and potentially positioning it as a frontrunner in credit management innovation.
Revolution of credit systems and beyond
However, companies operating in the blockchain sector are subject to stringent security measures. The Cyberspace Administration of China (CAC) mandates that all blockchain companies register their users and provide authorities with personal data and activity logs upon request. Incidents that could harm national security or public interests must be reported within 24 hours of detection.
Li Chunlin's statement also comes in the context of a recent data breach involving Chinese cybersecurity firm TopSec, which affected clients such as Dongwu Fund Management Co. Ltd and Linhai Rural Commercial Bank.
This incident highlights the extensive scope of China's cybersecurity model, encompassing not only personal and financial data but also the regulation of sensitive topics on social media, including investigations into official corruption and criticism of authorities.
As we wrote, China is ramping up efforts to attract foreign investment, with Vice Premier He Lifeng meeting top executives from Apple, Pfizer, Mastercard, Cargill, and other multinational corporations on Sunday.
