It’s reported by THE PAPER that a blockchain research institution was officially established on Feb.26th. Wei Yingning, former vice president of China Insurance Regulatory Commission and Zheng Yang, director of Shanghai Finance attended the opening ceremony. Zheng Yang suggested that arrangements about blockchain could be first made and applied by the financial and legal communities in Shanghai to fuel the development of Fintech under controllable risks .

As an innovation in financial technology, blockchain is an open ledger using a peer-to-peer network where transactions can be made without a third party.

During the opening ceremony, Zheng said that blockchain is secure and cannot be altered retroactively by design, which can help speed up the exchange of value in a safer and cheaper way.

As to the future application of blockchain, Zheng believes that there will be three phases. Blockchain 1.0 represents a programmable payment system for digital currency, microcredit and international payment, while blockchain 2.0 is a programmable trading system for stock, debt, annuity and private equity and blockchain 3.0 for lottery, education and healthcare. Zheng noted :

“Blockchain could serve as a catalyst for simplification in financial services.”

To be specific, it can reduce credit risk, make transactions more efficient, reduce transaction fees, prevent fault and attack, trigger automatic transactions, meet requirements for regulation and auditing and accelerate the flow of digital assets.

Zheng said that by setting up a research institution, they wish some arrangements about the application of blockchain can be made by the financial and legal communities in Shanghai.

Sheng Yongqiang, vice president of Shanghai High People’s Court, pointed out that the application of blockchain might bring about certain changes in the rule of law.

First, the blockchain technology might be widely utilized in business dealings.

Second, it still has room for improvement in social governance modernization.

Third, as blockchain is inherently resistant to modification of the data, it can help prevent evidence from being eliminated.