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ChinaLedger White Paper Outlines Industry Blockchain Standards

ChinaLedger, the blockchain alliance led by Wanxiang Blockchain Labs, released its first white paper to provide technical specifications of its technology and the vision of the alliance going forward.

The official document, entitled “Whitepaper of Distributed Ledger for Applications in Chinese Capital Market,” describes the role ChinaLedger will play in the development and commercialization of blockchains in China. The alliance will specifically address various regulatory conflicts and work with its 11 regional commodity exchanges to establish a nationwide standard for the implementation of distributed ledger technology (DLT).

ChinaLedger is focusing its resources on the development of a shared base platform. It aims to establish an ecosystem wherein businesses and industry leaders can build applications on top of a standard distributed ledger protocol modeled after the base platform of the alliance. Other consortiums such as R3CEV tend to focus on blockchain technology joint projects revolving around the interoperability of its members.

The ChinaLedger official white paper reads:

“ChinaLedger is more of an alliance that aims to maintain a shared base platform with common features together while constructing their applications on respective implementations of the base platform. In this regard, ChinaLedger is an alliance with a resource sharing model.”

In order to establish an industry standard protocol for the usage of distributed ledger technology, ChinaLedger will work with the Internet Securities Commission of the Securities Association of China (SAC), an industrial self-regulatory body supervised by the China Securities Regulatory Commission that also functions as an advisory to the alliance. These oversight bodies will help to ensure businesses and organizations can avoid running into conflict with existing regulatory frameworks on both financial and non-financial applications.

“Since the establishment of ChinaLeger, the alliance has gathered systematic discussions among the members regarding the legal and regulatory environment of the Chinese capital market, the functional requirements of typical business scenarios and the progress to promote the applications of DLT,” the white paper reports.

Emphasis on the Vast Applicability of Distributed Ledger Technology

Throughout its white paper, ChinaLedger continues to place an emphasis on the vast applicability of distributed ledger technology. The alliance is actively looking into the development of distributed ledgers outside the traditional realm of finance.

It has identified three major categories wherein the base platform of ChinaLedger will be utilized: capital side, asset side and non-financial side.

Capital side refers to the application of distributed ledger technology as a currency and as a method of transferring stores of value in a flexible and scalable network. An example of a capital-side application of blockchain technology is bitcoin, which is recognized as a global store of value and is used by individuals around the world.

While distributed ledger and blockchain technologies are currently being explored by banks and financial institutions as means of payment, ChinaLedger outlines the applicability of DLT in several industries and markets that oversee trillions of dollars worth of assets and non-monetary properties. These include marketable securities, bulk assets, rights and interests, and credits of loyalty programs.

The alliance will focus on these four assets and properties with its shared base platform to maximize the potential of DLT to settle, store or process stocks, bonds, futures, funds, options, lands, commodities and other physical assets.

Interestingly, within the base protocol of ChinaLedger, there exist two methods of data settlement that businesses or organizations can choose from. The first option is to manage funds and assets in different structures, managing funds off-chain and assets on-chain. In this ecosystem, funds are moved by a “payment gateway” among its members.

The second option is to manage both funds and assets on-chain, allowing the transfer of funds and the settlement of assets simultaneously. This is beneficial to businesses or platforms that have to complete the trading of assets and processing of funds at the same time.

Apart from the application of DLT in asset trading and settlement of funds, ChinaLedger will actively investigate and develop unique DLT-based platforms and technologies that can be applicable to other industries in China.

In the beginning, ChinaLedger aims to engage itself in the capital market by introducing a “settlement coin” pegged to fiat currency. Over time, it hopes to detach itself from fiat and work independently, processing 100,000 transactions in one second and demonstrating a large daily volume of 80,000,000 data points or transactions.

Joseph Young

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