Blockchain Needs Centralization, Chinese SEC Believes

An official from one of China's financial regulators believes that blockchains are better without full decentralized
06 March 2018   123

A Chinese official from the financial department, speaking at a Beijing state conference said that a completely decentralized blockchain  is not the most optimal solution. This is reported by CoinDesk.

Speaking at the People's Political Consultative Council of China as a policy advisor, the head of the technology department of the Chinese Securities Regulatory Commission, Zhang Ye, called on China's public sector to use advanced technologies such as AI and blockchain to provide state services.

But with one caveat - although Chiang believes in the potential of the blockchain, it is necessary to use a centralized infrastructure to fully realize its capabilities.

Blockchain's advocates for absolute decentralization have no solid ground, because [blockchain] itself is a software developed in a centralized way. So is the public key infrastructure, which remains an important feature adopted by blockchain. The key is to explore how to achieve decentralization through a centralized infrastructure.

Zhang Ye

Head of the technology unit, China's Securities Regulatory Commission

According to Zhang, in some cases, decentralization can really do more good, but he doubts that absolutely all the blockchain should be decentralized.

In addition, according to Li Lihui (former president of the Bank of China, and now - head of the blockchain research department at the Chinese National Association for Financial Activity on the Internet), many of the current blockchain projects are designed, in fact, using a variety of centralized elements and without full decentralization

Cryptocurrency to be Regulated in France

French Ministry of the Economy and Finances creates working group to regulate cryptocurrency
22 March 2018   120

Bruno Le Maire, the French Minister of the Economy, announced the government initiative to constitute the instructions and regulations towards cryptocurrency. The group is also aimed to decrease the influence of Bitcoin and altcoins to the formal system of economy with the help of required concept. These measures would help French government to prevent tax avoidance and some other criminal activities (such as money laundering).

In an op-ed that was published in French media this week the Minister of the Economy Bruno Le Maire made a promise not to miss the blockchain revolution. He refined the reasons of the French authorities`decision to regulate the technology. According to his point of view, it is impossible for any consumer or entrepreneur to carry out a transaction, invest, develop in business being in a regulatory vacuum. The Minister also put this position on the top among the rest questions to be discussed at G20 Summit in Buenos Aires. Bruno Le Maire is sure that the role of France is to be a driving force in “building the world of tomorrow”.

The Minister is going to present his case at the G20 Summit in 2018 in Argentina. He hopes that the framework can help in decreasing illegal activity in cryptocurrencies. Le Maire also explained that the sphere of digital funds is extremely attractive for criminals.

The leader of the working group is Deputy Governor of the Central Bank of France Jean-Pierre Landau. The French Central Bank supports the Government and hopes there would be no negative impact and consequences for the traditional economy system.

The key object of cryptocurrency regulation is to limit various negative factors in the financial sphere caused by digital money, such as the price volatility. Le Maire claims that at the same time the regulation of the cryptocurrency can support the development of the technology and can even lead to the economic growth. As blockchain can destroy not only traditional daily practices in banking and financial markets, but also patents and certified acts, the French Minister of Economy urges that the working group should foresee all these changes and become “actors of this revolution”, instead of simple viewers.