Editor's Note: This article comes fromChain new (ID: ChinaBlockchainNews)Editor's Note: This article comes from

Chain new (ID: ChinaBlockchainNews)

Chain new (ID: ChinaBlockchainNews)

As a new thing, blockchain technology is developing rapidly, but it also brings regulatory challenges to various places. Looking at the world, sandbox supervision has become an increasingly popular option.

"In the process of blockchain development, there have always been problems such as legal gaps and regulatory challenges brought about by new technologies. The implementation of sandbox supervision methods is to fully release the risks brought by blockchain technology within the scope of controllable risks. The innovation value and unknown challenges, so as to rationally explore the effective path of blockchain development.” Fan Jingang, executive secretary-general of the Blockchain Professional Committee of China Information Association, told Lianxin.

Specific to our country, if the blockchain wants to realize its own potential value, it still faces the innovative research and development of independent and controllable technologies and the exploration of application paths in line with national conditions. In terms of technology, there are still technical barriers in terms of performance scalability, functional interoperability, security and controllability, etc.; in terms of application, a sustainable and operational business model and a compliant and sound regulatory system are still in the exploratory stage.

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Regulation and inclusive development go hand in hand

The sandbox supervision mechanism originated in the United Kingdom and is applied to the innovation of financial technology. The blockchain has obvious financial attributes and technological innovation. Therefore, it has also been included in the scope of sandbox supervision by various countries to formulate implementation methods in line with their respective national conditions. Generally speaking, sandbox regulation has three main purposes: publicizing the government’s openness to new technologies; encouraging technological innovation; and giving regulators the opportunity to learn new technologies.

Although the sandbox regulatory system has many advantages, it has also encountered many complaints in the process of implementation and development in various countries. For example, it is unclear to what extent the systems of participating institutions have been evaluated in the sandbox supervision project; it is not clear what benefits the participating institutions have through the sandbox supervision test, and the subsequent development of these institutions is also unclear. In fact, there are not a few companies that pass through the sandbox and end up going out of business.

In addition, there are also many controversies in the scale of sandbox supervision. For example, practitioners in the UK believe that British regulators are too conservative, resulting in slow progress in technology and the market; but Canada believes that sandbox regulation is too loose and has become an administrative process, which loses the significance of regulating new technologies and encouraging innovation. They believe that "sandbox regulation" is just a "rubber stamp" of administrative agencies. The sandbox regulatory rules of the two countries are similar, but the implementation is very different.

"Our country's blockchain industry lacks effective landing applications. Either it is to cut leeks with air coins, or it is to go to the chain for the sake of chaining, some false applications that do not solve real problems. In addition, supervision is lagging behind, and children's dirty water is poured out together. Sandbox supervision is to provide a certain space for innovation within a controllable range.” Wang Donglin, an international cryptography application scientist and founder of YottaChain distributed storage public chain, told Lianxin.

Pang Yinming, chairman, president and founder of Lianji Technology, also felt the same way. He told Lianxin that there are two main problems in my country's blockchain industry: one is that the technology needs to be further improved, including massive data processing, cross-chain technology, etc. ; Second, the promotion of application scenarios is relatively slow, especially the decision-making process of some large domestic institutions and enterprises is relatively long, requiring a lot of detailed consideration.

"In the blockchain industry, many technical and application explorations need to be realized through sandbox supervision. One of its significant advantages is that under the unified leadership of the government, innovation can be carried out in a relatively standardized manner. We are also looking forward to There can be more attempts such as sandbox supervision, which will promote the development of the entire blockchain industry." Pang Yinming proposed.

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Sandbox supervision should be targeted

In July 2017, the Ganzhou Blockchain Financial Industry Sandbox Park in Jiangxi Province and the local new financial supervision sandbox were officially launched. The park is jointly established and operated by the Ganzhou Municipal People's Government, the National Internet Emergency Center, Xinhuanet Co., Ltd., and Ganzhou New Chain Financial Information Service Co., Ltd. It is China's first "supervisory sandbox park" led by a government department.

As the political and financial center of the country, Beijing is also constantly exploring the sandbox supervision model. As of June 2020, Beijing has announced two batches of fintech regulatory sandbox pilot applications, with a total of 17 applications. Among them, there are three projects applying blockchain technology. The first batch of projects are IoT-based item traceability certification management and supply chain finance. There are two second batches: one is industrial financial services based on blockchain, and the other is enterprise electronic identity authentication information system (eKYC) based on blockchain.

"On the whole, our country's sandbox supervision system adheres to the principle of prudence and scientific development. The design of the sandbox supervision system needs to take into account technical, legal, and institutional issues, otherwise it may be biased." Pang Yinming told "Lianxin" said.

Many practitioners have suggested that sandbox supervision is an administrative means and needs to be more scientific and perfect. Moreover, the blockchain technology is changing from the current single-chain to multi-chain, and will become a transnational and cross-regional chain network in the near future. How can the supervision capabilities of regulatory agencies keep up with the continuous innovation of blockchain business?

"Technical issues are resolved by market entities, and technical risks can also be resolved by market mechanisms like traditional IT; institutional issues are more driven by industry departments (such as the Ministry of Industry and Information Technology); legal compliance issues are the most important concerns for regulatory authorities Yes.” Wang Donglin believes that, in contrast, sandbox supervision should pay more attention to legal issues.