New Regulatory Authority Will Certify Digital Payments In China

The central bank in China, named the People’s Bank of China, will soon certify 11 types of financial technology hardware and software which are widely used for digital payment and blockchain services under its new verification system called the Certification of Fintech Products. The new regulatory authority is now officialized as the central bank released the first line of fintech products.

Details in the regulation news show that these products could be used in both front-end and back-end development for digital payment services. Everything was confirmed in the official filings dated on October 26 from the bank.

Additionally, the new regulatory authority comes in time when China is boosting the development of new financial infrastructure – including a digital version of its currency and a major push by the President Xi Jinping in order to capitalize on blockchain technology.

What’s more evident is the fact that the central bank envisions the national digital currency as one that will spike the digital payment industry. In that manner, it will tout its own coin and its security features (and off-line transaction abilities) as superior to the commercial products offered by the China Alipay and WeChat Pay services.

With more than 11 fintech products currently on the list of the central bank, the certification system will be the one that covers all the products which could be included in the digital payments technologies. As the new regulatory authority noted, these may include point-of-sale mobile terminals, user software, security carriers, embedded application software and chips.

The central bank will also grant applicants a Certification of Fintech Product (CFP) if their products pass the examination and on-site checks. The certificate will be thoroughly reviewed and renewed every three years, as the bank noted.

Moreover, the related authorities will conduct random inspections on any step of the production process. This way, they will ensure compliance and make sure that the certificate is valid. They will also be allowed to stamp the certification on their logos – but won’t be able to use it to directly promote a product or for advertising.

One of the specific items by the new regulatory authority that caught the eye of analysts is the trusted execution environment (TEE) – a technology which is praised as one that can assist in the creation of a “consortium blockchain network and verifying blockchain transactions in financial transactions use cases,” according to the filing.