Shenzhen's take on blockchain technology-city's transportation and beyond
As China continues in putting on harsh rules and regulations on the cryptocurrency market (the government has banned crypto trading, ICOs, and crypto exchanges,) the country is nonetheless open to blockchain technology. Shenzhen, the leading Chinese technology hub, has made significant strides in blockchain application. In March 2018, Shenzhen became the first city in China to implement blockchain-based electronic invoices to the city’s transportation system.
Blockchain-based electronic invoice
Partner with Tencent, the tech giant headquartered in Shenzhen, the Shenzhen Municipal Taxation Bureau has developed a blockchain-based electronic invoicing system. The system allows passengers to view and pay for their trips via the WeChat payments app. The blockchain ledger, which acts as a distributed accounting database, records the payment and generates an electronic invoice.
In 2019, the service is available at all Shenzhen’s metro stations as well as some of the city’s taxis and airport shuttle buses. As of March 15, 2019, this blockchain-based electronic invoicing system had issued more than 1 million electronic invoices facilitated by blockchain tech. The total invoices amounted up to 1.33 billion Chinese Yuan (circa $200 million). According to the Securities Daily report, the blockchain ticketing system is going to benefit more than 170,000 passengers in Shenzhen daily.
The city’s transport system is hardly the only area one can spot blockchain-based E-invoice. The use of blockchain-based invoices is now widely used in the retail, catering, finance, and hospitality sectors in Shenzhen. Based on the report from Tencent, the company’s blockchain platform has issued E-invoice with a total face value of over 1.33 billion Chinese yuan for transactions in the city as for March 2018.
The future of Shenzhen’s blockchain industry
As the first city in China to be named a National Self-Innovation Demonstration Zone, innovation is in Shenzhen’s genes. In the blockchain ecosystem, Shenzhen has maintained its competitive edge in the past years, and could potentially become the forefront center of blockchain industry for the following reasons:
1. Bitcoin mining in Shenzhen
Shenzhen has a comprehensive bitcoin mining hardware production system and one of the largest distribution networks of bitcoin mining hardware in China. The Huaqiangbei market in Shenzhen is also the largest distribution center for mining hardware in China and even the world.
2. The leading number of blockchain patents
According to data from the Beijing News’ Smart City Research Institute, Beijing, Shenzhen, Shanghai, and Hangzhou lead the country in terms of the overall number of blockchain patents. Following Beijing, Shenzhen holds the second spot with 459 blockchain-related patents.
3. Rapid blockchain industry expansion and development
The White Paper on China's Blockchain Industry Development in 2018 indicates that Beijing, Shanghai, Shenzhen, and Hangzhou are still the four cities with the highest level of entrepreneurial activity in China's blockchain business.
4. Policy support
In March 2018, the Economic, Trade, and Information Commission of Shenzhen announced that blockchain is among the sectors that receive priority support from the local government, with related projects eligible for up to 2 million Chinese Yuan (about 295k USD) of government aid. In the following month, Shenzhen launched its first block-chain fund, which has raised 500 million Chinese Yuan (about 7.3 million USD,) with the Shenzhen city government supporting 40 percent of the fund.
With the promising back up from the local government, rapid industrial development and active market activities, as well as support from leading tech giants like Tencent and Huawei, we have solid reasons to believe that Shenzhen is going to continue growing into one of China’s leading blockchain hubs.
China Daily ChinaDaily.com.cn
China Securities Journal http://www.cs.com.cn/
Tencent Cloud https://cloud.tencent.com