Why Finance Should Stay Away From Blockchain Technology

Looking at the history of human technological development, true technological innovations are often skeptical in the early stages, even with Einstein's theory of relativity. But instead of experiencing such scientific skepticism, blockchain seems to have been talked up from the moment the concept was introduced. However, several years have passed since its introduction, and people have not heard of any country or company that has actually used blockchain technology to solve real problems and create new value. If a technology has little practical effect on the ground, but a lot of people say it is good, we can not rule out the suspicion of hype.

The author has three views on blockchain. First, the blockchain can not be combined with the currency, because the biggest feature of the blockchain is decentralization, but the monetary policy is one of the main economic policies of the countries around the world, not only can not be decentralized, but also based on the state's monopoly on the issuance of currency, which can not be subverted over a long period of time; secondly, the blockchain technology should not be combined with the financial, because from the existing market situation, blockchain is not very helpful to improve the efficiency of finance. Third, if blockchain is to be applied, it is best to use it in the real economy, and its non-tampering characteristics can also play a role in art appraisal and other aspects.

Only from the perspective of enhancing financial operation efficiency, the current payment system in China has been quite developed, and the Internet has enhanced the speed of payment. In this case, if the blockchain technology is used, the capacity of each block is limited, can not be as infinite as the network, the blockchain applied to the financial sector, on the contrary, may reduce efficiency.

Many people often say that blockchain can improve credit and prevent fraud. The reality is that the concept does solve the problem of uniqueness. For example, if this note is genuine, then all future counterfeits will therefore be denied. But uniqueness confirmation, can not identify scams like e rent treasure, we currently have to guard against financial risks, mainly illegal storage, fund-raising fraud, avoidance of regulation, excessive leverage, etc., in the process of solving these problems blockchain technology can not help.

Compared with the so-called technology to prevent and control risks, the institutional means is the sharp weapon to prevent risks. Recently, the Guiding Opinions on Regulating the Asset Management Business of Financial Institutions was formally promulgated. As a programmatic document for the prevention and control of financial risks, the new regulations on asset management mainly improve the system, such as the threshold for qualified investors, new provisions on rigid payment, term mismatch, capital pools and many other aspects. The implementation of the requirements of the new regulations on asset management is the basis for the effective prevention and control of financial risks. Of course, here also involves the operational level, but it is important to recognize one thing, the technical means is only an auxiliary of risk prevention, it can not sing the main role.

Currently, China's prevention and control of systemic financial risks into a new stage, time is tight, the task is heavy, but whether in order to improve financial efficiency, or prevention and control of financial risks, blockchain may not be a good helper. In this sense, in order to prevent emerging types of financial risks, blockchain is best to stay away from finance.

Content source Economic Daily News