Blockchains Must Have Centralized Foundation: Chinese Regulator
An official from one of the top financial agencies of China stated that he believes blockchains function more effectively when they're built on a system.
Zhang Ye, director of the China Securities Regulatory Commission's (CSRC) information center, said on Sunday that the government should devote «great attention» to the development of blockchain technology.
However, Zhang — who made these remarks at the «Two Sessions» conference in Beijing during a meeting with state media outlet Securities Times -- tempered his enthusiasm for this nascent technology by stating that more research needs to be devoted to building a decentralized blockchain in addition to a centralized foundation.
"[F]rom a technical point of view, the complete decentralization of the blockchain is not valid since the blockchain itself is a program and the software must be centralized," he said, according to a rough translation. «Therefore, how to build a decentralized system based on a centralized structure needs further research.»
The regulatory officer did acknowledge that some blockchain applications may require decentralization, but he explained that these situations should be restricted and he didn't go into detail about what software should and should not be centralized.
«Admittedly, some application scenarios need to be decentralized, but whether all scenarios need to be decentralized requires careful consideration,» he said.
Zhang's comments are the latest evidence that China is grappling with whether and how it can reap the benefits of blockchain technology whilst keeping complete control of the system's underlying infrastructure.
Last month, the People's Daily — a state-sponsored media outlet — published an article praising blockchain technology, even as the government has taken steps to snuff out what small volume remains in the country's once vibrant cryptocurrency trading industry.
Notably, though high-ranking official has also reportedly called for the authorities to set a state-controlled digital asset trading platform, sparking speculation that the authorities could ease prohibitions on cryptocurrency trading, as long as the markets are directly controlled by the government.