China has been developing itself to be one of the most powerful global economies for the past several decades, even challenging the likes of the United States and the EU. The recent announcement that the People’s Bank of China, their central bank, is not only optimistically looking at cryptos, such as the Federal Reserve in the US and the Bank of England in the UK, but is also among the first to distribute a digital currency nationally. China is the first to distribute their digital yuan for merchants to accept during transactions, and it has so far been a success. This progressive attitude towards not only cryptos, but fintech in general, has led massive funding increases in China to get ahead of the world. At this moment, China’s fintechs are expected to meet their capital goal in two years at the latest.
China is definitely not alone in this space, as for example the UK has been looking to become the global hub for fintech and digital currency as a way to capitalize on their fintech proficiency and cause an economic boom after Brexit. Just like the UK, China is taking the time to ensure safety and security in their industry before opening it up to the masses. An example of this in China is how Chinese regulators are instilling surveillance over online lending practices among citizens, especially fintech startups looking to expand. Guo Shuqing, the head of the China Banking and Insurance Regulatory Commission (CBIRC), said that “starting a business needs capital, so does starting a financial business,” expressing his enthusiasm and willingness to give fintechs an equal chance in funding. He goes further by adding “as long as internet platforms conduct financial operations, the requirement of capital adequacy ratio on them should be the same as financial institutions.”
As is always with business, whoever is willing to take the risk and look far into the future for relevant trends is most likely to come out on top. If COVID-19 has taught everyone globally is that brick and mortar stores are going to die quicker than imagined, and online proficiency is required way more than before. Ant group, a fintech which is an associate of the Chinese Alibaba Group, has raised over $37 billion for its IPO last year and according to Guo will have no regulations for further developments as long as they abide by the law. One of the biggest questions now is will China or the UK become larger in the fintech world in the next coming months.