Chinese Stock Exchange to List Securities on the Blockchain

The entrance to the Forbidden City in Beijing, China. The China Center for Information Industry Development recently ranked EOS as the world's best blockchain.
The entrance to the Forbidden City in Beijing, China. The China Center for Information Industry Development recently ranked EOS as the world’s best blockchain, just ahead of Ethereum.

Hong Kong, CHINA – China’s attitude towards cryptocurrencies often mimics their price as the world’s fourth largest stock exchange, the Shanghai Stock Exchange announced that it was planning to put blockchain technology, essentially decentralized ledger technology, on its securities transactions. The move would mimic the current use of blockchain technology that already exists on decentralized cryptocurrency exchanges such as Switcheo, which is based on Chinese tech giant Alibaba’s NEO. The Shanghai Stock Exchange is no minnow, with the city at the mouth of the Pearl River Delta serving as the financial center for China, the bourse had a market cap of US$5.01 trillion as recently as early this month, according to data from its website. And although many aspiring Chinese companies seeking a listing have chosen to do so offshore in places like New York or even nearer home in Hong Kong, the depth of Chinese liquidity and breadth of investors has ensured a steady flow of initial public offerings and deal flow. In its announcement the Shanghai Stock Exchange noted that “most people” consider that blockchain technology can “help improve the transparency of the securities industry.”

“Part of the market is now starting to adopt this technology in part, and larger-scale industry applications will do so after a few years.”

The Great Wall of China, not just useful for keeping out barbarians.
The Great Wall of China, not just useful for keeping out barbarians.

These comments should also be seen in light of China’s overall push to promote blockchain technology, which Chinese President Xi Jinping has publicly announced was part of China’s “economic revolution.” Shanghai’s move, which brings it closer than ever to a cryptocurrency exchange should also be seen in light of Chongqing’s proposal to launch its own digitized asset exchange as well as JD.com’s move to offer tokenized asset-backed securities. But Chinese crypto-advocates looking for Bitcoin onramps to trade in other cryptocurrencies shouldn’t hold their breath as the Chinese central bank, the People’s Bank of China cheerfully noted that the yuan now only accounts for less than 1 percent of global Bitcoin trade. For now at least, Chinese crypto proponents will need to wait for the Chinese-issued and approved cryptocurrency, one that will provide decentralized application, with centralized control.