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China's central bank issues the first DLT security guidance for the financial industry
China’s PBOC Issued DLT Security Standards for Financial Industry
On February 5, China’s Central Bank released Finacial Distributed Ledger Technology Security Specification, the first of this kind to standardize security requirements for DLT to be deployed in the financial industry.
The 35-page document specifies the security system and structure for the financial industry using DLT, covering subjects from infrastructure hardware and software, cryptographic algorithms, correspondent nodes, ledger data, consensus protocols, smart contracts, ID management, privacy protection, operational to maintenance requirements and governance.
Led by PBOC, financial institutions, including the State-owned banks China Industry and Commerce Bank, China Bank of Agriculture, Bank of China, China Construction Bank, China Development Bank, and privately-owned enterprises, including WeBank backed by Tencent, MyBank backed by Alibaba, JD Digits backed by eCommerce giant Jingdong and Baidu, participated in the drafting of the specifications. Additionally, professors from academia such as Peking University and Zhejiang University who have been reputable in the blockchain industry were invited to help with the creation of the specification.
This is the first effort by PBOC to layout DLT security framework and details for corporations and technology solution providers to follow. It further validates PBOC’s recognition of blockchain and its potential in the financial industry. The clarity will help Chinese companies move faster and further to build blockchain-based infrastructure and applications such as cross-border payment and settlement systems and asset-backed securitization (ABS), a fast-adopted supply chain finance tool in China.
It is believed that this guidance has also established the foundation, from a technology perspective, for the imminent deployment of China’s central bank digital currency, DCEP.
This guidance does not include any non-technical elements related to blockchain, e.g. legal. We expect additional details to follow.
For the full document, please visit link.
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