WeBank has entered a partnership with New York-based Digital Asset, to integrate smart contract technology with the blockchain platform FISCO BCOS.
Digital Asset’s smart contract language, DAML, will be plugged into the FISCO BCOS platform developed by the Financial Blockchain Shenzhen Consortium working group, which includes such companies as Huawei and Tencent alongside WeBank.
The platform was developed specifically to meet the demands and regulatory requirements of the finance industry in China, and has been selected as infrastructure for BSN, the country’s national network for facilitating blockchain-based projects along with the development of smart cities and the digital economy.
DAML is used to create distributed applications connecting different technology silos, allowing big and small organisations to develop applications with greater speed and security.
According to Yuval Rooz, co-founder and CEO of Digital Asset, WeBank has “emerged as a leader paving the way for the next generation of distributed customer applications across China”.
WeBank’s executive VP and CIO, Henry MA, describes the collaboration as a “key milestone” for the consortium delivering blockchain-based across the finance industry “and other sectors in China and beyond”.
Consisting of a set of blockchain applications, rather than a single blockchain, the FISCO BCOS community spans more than 10,000 developers and over 500 corporate members. This will be seen as vital by commentators who consider interoperability of different blockchains as a key pain point in the wider adoption of distributed ledger technology (DLT).
Digital Asset was founded in 2014 to develop products facilitating transfer of assets between financial institutions and has also worked with Deloitte, Accenture and the stock exchanges of Australia and Hong Kong.
China’s blockchain push
This announcement coincides with the launch by the Chinese government of a committee of academics and companies to create national standards for blockchain technology.
Unified technical standards would likely be positive for blockchain’s scalability, an oft-cited concern holding the technology back.
The “National Blockchain and Distributed Accounting Technology Standardisation Technical Committee" includes Huawei and Tencent as members and is part of the country’s push to become a world leader in the space.
The Chinese Ministry of Industry and Information Technology published a list of the companies last Sunday that have joined this committee which, along with Huawei and Tencent, includes e-commerce firm JD.com, internet service provider Baidu, and Alibaba affiliate Ant Financial which runs Alipay.
President Xi Jinping spoke of the need to “seize the opportunities” presented by blockchain technology in a speech in October 2019, most likely with an eye to stealing a march on Europe or the US’s own ambitions in this area.
Research by CB Insights has found that China accounted for 22% of blockchain investments in 2019, trailing the US’ 31%.
This is however quite a change from 2015, when the US boasted 51% of funding compared to a paltry 2% from China.
Should the committee succeed in creating a set of standards for blockchain-based projects, it is likely it will be seen as a blueprint for businesses and regulators in other countries.
However, these will lack the same level of government control over business and technology that the one-party Chinese state has.
This has already seen China surge ahead of most other countries in the development of a digital currency, which is rumoured to be nearing fruition.
Any domination of blockchain adoption by China would be of concern to the leading economies in the West, but the opportunites would possibly be too significant for the likes of Japan, Korea, Singapore and other APAC countries to ignore.