The China Digital Finance Research Alliance was recently established, and Xu Zhong from the central bank pointed out five major misunderstandings about blockchain

The founding ceremony of the China Digital Finance Research Alliance was held at the third annual academic conference of the Digital Finance Research Center of Peking University on September 1. The alliance was jointly initiated by 24 colleges and universities and scientific research institutions in China, aiming to strengthen the academic research and talent training exchanges and cooperation in the fields of digital finance/financial technology/Internet finance/financial big data analysis in the Chinese academic community. At this annual meeting, Xu Zhong, director of the Research Department of the People's Bank of China, pointed out in his speech that the current misunderstandings about blockchain are concentrated in five aspects: first, the trust relationship within the blockchain cannot be extended outside the blockchain; second, the limitations of consensus; third, the economic connotation of cryptocurrency; fourth, smart contracts are neither smart nor contracts; and fifth, the bottleneck of smart contracts. Based on the above five misunderstandings, Xu Zhong proposed that the three directions of blockchain's future application in the financial field are trade financing, accounts receivable and digital bills. Finally, Xu Zhong pointed out that the application prospects of blockchain should be viewed rationally. At present, there are still many immature aspects of blockchain, and it is necessary to fully understand what blockchain can and cannot do, and effectively prevent and control risks while giving full play to the advantages of blockchain. (China Finance 40 Forum)