With the aim of focus on promoting the blockchain technology in China, Hong Kong-listed fintech company Credit China Fintech Holdings and Blockchain infrastructure provider BitFury Group set up a joint venture. The annoucementof te benture was made on Thursday.
$30 million would be invested in BitFury shares and the setting up of the joint venture by Credit China Fintech as part of the deal. BitFury’s bitcoin mining equipment wil be sold by the joint venture.
This will be the first major venture in China of BitFury Group which provides hardware and software around blockchain technology.
Blockchain works like a huge, decentralized ledger that records every transaction made on the chain and refers to the technology underlying the crypto-currency bitcoin. To prevent tampering, the information is stored on a global network. Using it to secure information, facilitate bank loans and enable trading in a cheap and efficient way are among the various applications for the blockchain.
Including applications such as peer-to-peer lending and payments services, the company was exploring the use of blockchain on some of its fintech platforms, Phang Yew Kiat, vice chairman and CEO of Credit China Fintech, said.
“We have a working prototype payment system using blockchain technologies working in our research laboratory,” Phang said.
A variety of applications for block chains have been developed as the technology evolved from being a new technology with an abundance of potential to companies, governments and financial institutions looking into a variety of applications for it.
Ng Zhi Ying, an analyst with Forrester, said that with industry players still experimenting with proof-of-concepts on blockchain’s various uses and wide-scale implementation still some way off, it is in its nascent stage.
For example, a proof-of-concept project that would allow inter-bank payments using blockchain was announced in a joint project where the Monetary Authority of Singapore teamed up with blockchain technology company R3 and a consortium of banks and the Singapore Exchange, last year.
His firm was also looking into using blockchain for its massively popular Alipay system, the CEO of Alibaba’s payment affiliate Ant Financial said at the World Economic Forum in Davos earlier this month.
“It still hasn’t gained that maturity level and people are trying to find out how do you use (blockchain), how can we scale it and how do you justify the return-on-investment of investing in this technology,” Ng said.
Application such as tracking the movements of goods in the shipping industry, cross-broader payments using bitcoin, preventing fraud and risks around smart contracts in the insurance industry and customer identity authentication for banks are some of the area that the various financial sectors are looking to make use of blockchain technology.
With the aim of bringing industry players together and highlighting the latest blockchain innovations, the Global Blockchain Business Council by BitFury Group and international law firm Covington was also set up which indicates the growing popularity of the technology.
(Adapted from CNBC)