The Chinese government will use blockchain for social security

Blockchain technology will be used in China's social security system because it can facilitate trade and lower transactions costs, according to Wang Zhongmin, vice-chairman of the National Council for Social Security Fund. "There's no doubt that blockchain technology will be used in the social security system because of its valuable applications in the investment and management of social security funds," he said.



Wang said blockchains can enable people to trade freely and lower transactions costs.



At the end of 2015, the National Council for Social Security Fund had 1.9 trillion yuan ($284.5 billion) in funds under management, increasing 24.6 percent year-on-year.



At the moment, China's main initiative in the blockchain space is the China Ledger Alliance, a noncommercial organization focused on research and development of blockchain applications. Led by research and development company Wanxiang Blockchain Lab and similar in structure to international collaborations, it can be considered China's answer to the rapidly evolving blockchain ecosystem.



The aim of the alliance is to adapt and develop existing blockchain technology to the needs of Chinese businesses and set standards across the industry to ensure regulatory compliance in China's legal environment. The alliance counts 15 members, including both financial services firms and technology companies.



Early this year, China's central bank announced its investigation into digital currencies as an answer to the growing interest of Chinese investors in bitcoin and other cryptocurrencies.