China’s Central Bank To More Tightly Control Chinese FinTechs

The People’s Bank of China (PBoC) is looking toward new technologies to keep a closer eye on the nation’s FinTech, blockchain and digital lending markets.

“Regulators using new technologies to supervise FinTechs and the financial industry — called Suptech, short for supervisory technology — is another area where China is generally thought of as a world leader,” said one adviser who works closely with large Chinese FinTech companies, according to the Financial Times.

PBoC became one of the first central regulatory institutions to ban initial coin offerings, while also imposing a strict ban on bitcoin and trying to weed out bitcoin mining companies in the country. It has also been unfriendly toward other forms of digital finance, including the peer-to-peer lending industry.

Yet onlookers have noted that PBoC has been working diligently toward its own FinTech growth. It announced last month that it is ramping up the development of its own cryptocurrency. In a video conference to discuss its priorities for the second half of 2019, the bank revealed cryptocurrencies will be closely monitored, suggesting that it should accelerate the research and development of its digital currency.

Additionally, the bank said it should strengthen financial risk remediation as well as its policy propaganda interpretation and respond quickly to social concerns.

While its actions seem contradictory, PBoC recently published a three-year FinTech development plan, which could help clarify its position. Experts noted the central bank’s goal seems to aim to increase the “controllability” of the country’s FinTech, while also boosting risk prevention.

“Ensuring there is fair play in financial markets through Suptech is an important part of what they are trying to do,” said Syed Musheer Ahmed, general manager of the FinTech Association of Hong Kong.

And as for the country’s future in crypto, Huawei founder and CEO Zhengfei Ren has noted that China has more power than Facebook when it comes to issuing digital currencies, and if it moves into the crypto space, it will have a big impact.