China FinTech Digital Currency Alliance is officially established! Huobi becomes one of the initiators!

On December 20, the first "2016 China Shenzhen FinTech (Financial Technology) Summit" was grandly held in Shenzhen, hosted by the Shenzhen Municipal People's Government and organized by the Municipal Financial Office and Qianhai Authority. Li Lin, Chairman of Huobi.com, China's largest digital currency trading platform, was invited to participate in the summit.

At the opening ceremony, Yao Yudong, chief economist of Dacheng Fund Management Company, issued the "Proposal for the Establishment of China FinTech Digital Currency Alliance and FinTech Research Institute" on behalf of the initiators. Huobi is one of the co-sponsors of China FinTech Digital Currency Alliance.

Huobi is one of the co-sponsors of the China FinTech Digital Currency Alliance

During the roundtable discussion, Huobi Chairman Li Lin, Shenzhen Financial Development Service Office Director He Xiaojun, former IBM Greater China Chairman and President Qian Daqun, Huishang Bank Co., Ltd. Head Office CIO Chen Hao and other senior executives from various institutions held a roundtable discussion on the opportunities and challenges of digital currency.

In the global technology innovation survey released by KPMG, digital currency is listed as the most promising technology in the next three years, along with 3D printing, the Internet of Things, and biotechnology. This is inseparable from the widespread acceptance of the concept of digital currency. According to a survey conducted by Huobi Blockchain Research Center, central banks in many countries, including my country, are currently conducting research on the digitization of currency.

During the roundtable discussion, the guests analyzed the significance of RMB digitalization from the perspectives of supervision and banking, the challenges that RMB digitalization poses to commercial banks and its promotion of banking business innovation, and how technology companies face the opportunities and challenges of digital currency and even financial technology.

Huobi CEO Li Lin delivered a speech at the 2016 China FinTech Summit

The roundtable moderator, Zeng Qiang, founder of Shenzhen Xingen Capital and chairman of Huixin Financial Technology Cloud, asked:

"Mr. Li Lin, Huobi is currently the largest digital currency trading platform in China. Do you think Bitcoin can be circulated globally? What aspects of the Bitcoin system can be used as a reference?"

Huobi's Li Lin introduced:

“When it comes to the circulation characteristics of digital currencies, we must first make it clear that there is an essential difference between the digitization of legal tender and digital currencies. Huobi’s encrypted digital currencies, represented by Bitcoin, are essentially standardized digital assets. Of course, some experts also believe that they are a form of private currency.

Because sovereign digital currencies may choose to use the underlying technology of encrypted digital currencies - blockchain technology as one of the core implementation technologies, encrypted digital currencies are closely related to the digitization of currency.

As the world's leading digital currency trading service provider, Huobi has accumulated rich experience in digital currency operations and Bitcoin blockchain research over the past three years, which can provide a good reference value for future research on sovereign digital currencies. Among the many characteristics of Bitcoin blockchain, i.e. the public chain, Huobi's Li Lin believes that end-to-end, openness and traceability will have a significant impact on the digital currency studied by the central bank.

Blockchain has outstanding technical advantages in terms of security attributes such as non-repeatable transactions, non-forgeability, and non-tamperability. The application of blockchain technology can effectively reduce the cost of technology implementation and improve management efficiency. The anonymity of blockchain will also be applied according to actual needs under the premise that the country can control it.
In essence, sovereign digital currency is a private chain, while Bitcoin blockchain is a public chain. Although both are distributed ledgers, their consensus mechanisms are different. ”

Based on the experience of operating encrypted digital currencies, Huobi’s Li Lin introduced several very important characteristics of digital currencies and their impact on the circulation of sovereign digital currencies.

Disintermediation

Digital currency based on blockchain technology allows individuals to make end-to-end monetary payments directly through the digital currency network without going through financial service institutions.

Taking Bitcoin as an example, any individual can pay his or her own funds directly to other individuals through open source software, without going through financial intermediaries such as banks and third-party payment institutions. That is, the circulation of currency is completely end-to-end decentralized, and the payment model based on credit intermediaries of existing financial service institutions will end. This will be the most significant change that digital currency brings to currency circulation.

Openness

The protocol is unified and open. Take Bitcoin as an example. On the Bitcoin circulation network, any institution provides services based on the unified and open Bitcoin protocol. Since different institutions follow the standard protocol, it provides a basis for the cross-platform circulation of currency accounts.

This is like the balance of WeChat can be transferred directly to Alipay without going through a bank; the transfer agreements of ICBC and CCB are the same, and there is no need for a third-party payment company to provide a unified interface.
Therefore, from the perspective of Huobi's Li Lin, in the new era of digital currency, third-party payment companies that simply provide technical services for cross-bank protocols will disappear in the future, and account funds of financial service institutions such as WeChat and Alipay can be interconnected at a very low cost.

Open, transparent and traceable

Taking the Bitcoin system as an example, all transactions are open to the public and every transaction can be traced. If applied to the legal currency digital currency system, it can greatly reduce the cost of anti-money laundering. Combined with smart contracts, it can enhance the precise control and real-time tracking capabilities of the central bank's monetary policy and national financial policy implementation.

For example, if 10 billion yuan is allocated to a poor county, the circulation targets can be limited when the digital currency is allocated, and the entire circulation link can be traced, ensuring that the funds are used for their intended purposes and that fiscal policies are implemented in place from the perspective of the circulation of digital currency.

At this summit, many FinTech innovations and projects were unveiled and signed. Huobi became one of the co-sponsors of the China FinTech Digital Currency Alliance. At the roundtable, Huobi's Li Lin shared Huobi's research experience and achievements in the field of digital currency, and discussed the future development direction of the digital currency field with industry leaders, bringing a magical feast of encrypted digital currency to the elites who came to the conference from all over the country.