The People’s Bank of China will license 11 types of financial technology software and hardware that are broadly used for blockchain services and digital payments via its new verification platform titled “Certification of Fintech Products”.
As stated in filings from October 26, China’s central bank announced the first batch of fintech products that are to be used in front-end and back-end development processes for digital payment services.
As China is advancing seriously on the development of its new financial infrastructure and the digital version of its currency, this new regulatory system comes right on time.
The People’s Bank of China believes that digital currency will improve the digital payment sector as a whole. The bank is bragging about the superiority of its token’s security characteristics and offline transaction capabilities in comparison to other commercial products coming from WeChat Pay and Alipay.
As noted, the central bank of China offers 11 fintech products and the new system will cover all products that can be implicated in digital payment services. This includes embedded application software, point-of-sale mobile terminals, security carriers and chips, and front-end software.
All products that successfully pass the prototype inspection and on-site audit will receive a Certification of Fintech Product (CFP). According to the bank, this certificate has to be reviewed and renewed every three years.
Associated jurisdictions can review any step of the production process at a random principle to guarantee compliance during the certificate’s legitimacy. The certificate cannot be used for direct promotion of products but the related institutions will be able to put the certificate’s mark on their logo.
One interesting product in the list of 11 is the trusted execution environment (TEE), which is a technology that, as stated in the filing, helps in the formation of a “consortium blockchain network and verifying blockchain transactions in financial transactions use cases”.
In is interesting that in August 2018 Microsoft also filed for two patents for technologies that are quite similar and would enhance the security and scope of its blockchain services.