Shentu Qingchun hosted the 2016 China Blockchain Industry High-end Investment Forum and delivered a speech

The 2016 China Blockchain High-end Investment Forum was held in Shenzhen on August 17, with the theme of "Dreams Come to Reality - Blockchain Industry Development Trends and Investment Opportunities". Nearly 600 people from many securities institutions and listed companies such as Essence Securities, Guosen Securities, ZTE, Huawei, and Zhongqingbao, as well as from IDG, Hongbin Capital, venture capital institutions, investment funds and other domestic mainstream investment institutions, as well as economists, entrepreneurs, investors, policy makers and other people from all walks of life who are interested in blockchain attended the forum.

This forum brought together a large number of elites to analyze the latest information and development trends in the blockchain industry, introduce blockchain technology and the latest business models, conduct in-depth discussions and analysis on the blockchain industry, and at the same time enable seamless connection between high-quality blockchain projects and investors, building a bridge between the blockchain industry and capital.

As the co-organizer of this forum, Yinlian Technology participated in the organization of the forum. Shentu Qingchun, Executive Vice Secretary-General of Jinlianmeng and CEO of Yinlian Technology, was invited to host the first half of the forum.

Shentu Qingchun hosted the 2016 Blockchain Industry High-end Investment Forum

The forum started on time at 9:10. On behalf of the organizer, Shentu Qingchun expressed warm welcome and gratitude to the elites from the financial and investment circles. After the forum started, many industry experts expressed their views on the application and implementation of blockchain in the financial industry.

Shentu Qingchun delivered an important speech on "Blockchain and Financial Market Infrastructure", which focused on financial market infrastructure and the impact of blockchain on infrastructure.

Shentu Qingchun delivered an important speech

He first introduced the five major functions of financial infrastructure, namely payment, custody, clearing, settlement and reporting, as well as the three existing systems of payment, payment clearing and securities clearing and settlement, and pointed out the limitations of the current financial market infrastructure (this part refers to some of the views of Zhou Zilin, co-founder of the Baige Financial Forum).

The five major functions of financial infrastructure are payment system (PS), central securities depository (CSD), central counterparty (CCP), securities settlement system (SSS), and transaction database (TR). Among them, the payment system (PS) provides fund transfer services; the central securities depository (CSD) provides securities centralized registration, custody, redemption and other services; the central counterparty (CCP) is a clearing mechanism that ensures the normal performance of concluded transactions and is an important means to prevent systemic risks in the financial market; the securities settlement system provides securities transfer and settlement services; the transaction database (TR) is an institution that centrally collects, stores and discloses various transaction data to regulators and the public in order to enhance market transparency.

Limitations of financial market infrastructure: (1) There are many participants, and their business processes and related technical systems are also very complex. Many manual processing steps still exist, resulting in a large number of users and complex processes in financial market infrastructure. (2) Each participant needs to save and maintain its own independent and proprietary database, and each transaction must be notified to stakeholders. Reconciliation between different systems makes reconciliation in financial market infrastructure difficult; (3) There are no widely accepted standards for trading, clearing, settlement, collateral, capital, asset management and other systems, and there is a lack of interoperability between systems.

Then, Shentu Qingchun introduced blockchain from these limitations, pointing out that the use of blockchain technology can reduce trust risks, increase the speed of payment, transaction, and clearing and settlement, reduce operating costs, improve the level of automation, meet regulatory and audit requirements, and effectively prevent failures and attacks.

Next, he explained in detail the alliance chain applicable to the financial industry and how it can be applied to the securities market, securities clearing, payment clearing and other fields. In securities settlement, it is possible to record the general ledger of funds and capital through blockchain, and no longer need intermediaries such as custodian banks, brokers, clearing members, and settlement agents. Of course, the possibility of success of this application is very low, and it cannot be implemented if the interests of financial institutions are not guaranteed.

The interests of financial institutions are specifically manifested in: not changing user ownership, business ownership and processes, sensitive data ownership, regulatory requirements and architecture, etc. Therefore, Shentu Qingchun proposed a second solution, which is to make securities issuers, custodian banks, central securities depositories, central counterparties, settlement agents, and clearing members members of the alliance chain. The issuer issues securities based on the alliance chain. This will not harm the interests of financial institutions, but also unify the interfaces of various systems, and use the decentralized advantages of the blockchain area to improve the efficiency of clearing and settlement, effectively improving the limitations of the current financial market infrastructure.

In the field of payment and clearing, under the premise that the central bank issues digital currency, it is also possible to consider making the central bank, banks, and third-party payment companies members of the alliance chain. Enterprises and individuals conduct payment transactions through banks and third-party payment companies, which not only guarantees their respective interests, but also improves clearing and settlement efficiency.

Shentu Qingchun also predicted the development trend of the alliance chain. He believed that the development of the alliance chain will be divided into two stages. The first stage is the B2B stage, where clearing and settlement are carried out on the chain, or value is transferred on the chain, which is convenient for unified interfaces and clearing and settlement; the second stage is that end users go on the chain through institutions and eventually go on the chain independently. This stage is the ultimate performance of blockchain decentralization. Financial institutions are more likely to accept the first stage, and the application is relatively easy to implement. Finally, Shentu Qingchun's speech ended with warm applause from the audience.

Looking ahead, blockchain has great potential and will have a profound impact on the financial market. Other speakers at the forum mentioned that blockchain technology will have a profound impact on the economy and society, just like the Internet technology in the 1990s. However, there is still a long way to go for the development of blockchain. Gartner warned that the technology hype curve of blockchain has reached its peak, and a more severe situation may follow.

As a backbone force focusing on the blockchain industry, Yinlian Technology has been committed to the development of underlying blockchain technology and providing blockchain solutions for financial institutions. It will continue to accumulate technology and customers, polish products, and firmly contribute its strength in the wave of blockchain development.