On Mar 23rd, 2016, a meeting was held between PwC's Risk Assurance and TMT partners and the co-founders of BitSE (a local blockchain startup) in Shanghai. The two parties had an exciting discussion on the trend and perspective of the development of blockchain technology in China.
Blockchain could be traced back to the 2008 global financial crisis, but it was not until the explosive rise of bitcoin in 2013, that people started to pay attention to the underlying technology which supports bitcoin. Today, besides international banks such as Goldman Sachs, JPMorgan Chase, Citibank and Morgan Stanley, which have already made huge investments in blockchain, non-financial sectors, investment institutes, governments and regulators have also showed real enthusiasm for the technology.
William Gee, PwC China Risk Assurance FS Leader, said, "Blockchain technology supports an innovative business model. Its openness, decentralisation, high efficiency make up the core ideas that the Internet stands for." CY Cheung, PwC China Risk Assurance Partner, said, "blockchain has a lots of applications, both FS and beyond FS, and it meets the purpose statement of PwC which is helping the society to build trust and solving important problems of our clients".
Sunny Lu, co-founder and COO of BitSE, said, "blockchain is rooted in the financial sphere, but the potential can extend far beyond financial." The core of blockchain is a mathematic solution that builds trust between parties of transactions, and Bitcoin is just its first successful application. Blockchain is a decentralised, distributed ledger technology, with high efficiency, transparency, and non-repudiation built in, so its advantages could certainly go beyond financial related transactions, extending to sectors such as regulation, business, public welfare and social activities.
With the goal of helping to expedite the world with blockchain services, BitSE began its journey from Shanghai in 2013. Based on Blockchain-As-A-Service (BAAS) and boasting the most powerful blockchain in the world and its side chain, BitSE is building up a global Blockchain Service Platform. This platform provides professional services such as Hash Power Management, Digital Assets Management and Exchange, Application to Internet of Things (IoT), Identification and Proof, IP Protection and many more.
"Economic environment, business models and transaction practices in China are more complicated than in many other countries, and so to fully unleash the potential for blockchain applications here more customisation is required." said Jianbin Gao, PwC China TMT Leader. While further, according to Mr. Patrick Dai (Shuai Chu), co-founder and CTO of BitSE, "Although the market acceptance of blockchain in China is a bit slower than western countries, we've already gained seats in the technical front end, and have received more and more inquiries regarding this new trend."
A lot of blockchain research groups have already been established in China, while regulatory bodies and financial institutes are closely monitoring the transformation and potential impacts that will be caused by blockchain technology. The People's Bank of China (PBOC) is just one example, which had established a research team focusing on cryptocurrency back in 2014.
Charlie Fu, PwC Risk Assurance Central China Leader, said, "during the researching and implementation of blockchain applications, enterprises must not ignore new risks introduced by new technologies, either internally or externally. Comprehensive risk assessment, proper supervising and robust internal controls are crucial steps to assure the maximum value for the enterprises." Mr. Dejun Qian, co-founder and CEO of BitSE, said, "Blockchain could even help solve social problems, such as recent vaccine and food safety crises. By using blockchain technology, the transparency and traceability of supply chain processes could be improved remarkably, which would certainly lead to more public trust."
The success of blockchain technology cannot be achieved without a deep understanding of industry, transactions and risks. PwC and BitSE are undertaking a joint effort to contribute to broader acceptance and development of blockchain technology in China. The two parties have also explored the vision and strategic directions of cooperation including improving the effectiveness of supervising and efficiency of transaction, facilitating new technology adoption and new business development, solving social problems and building public trust, all through the application of blockchain technology. PwC and BitSE are committed to build a one stop shop for our clients, anticipating an exciting future for blockchain in China.