Biggest Blockchain Startup in China to Release New Technology in 2017
Officials of Shanghai-based Juzhen Financials, the biggest Chinese Blockchain start-up, announced the company will unveil a Blockchain technology specifically for banks this year. The company was able to put up $23 million in September of 2016 to aim for a population structure similar to start-ups, Digital Asset Holdings and R3CEV under the R3 Consortium.
Digital Asset is a software corporation that develops Distributed Ledger Technology (DLT) solutions for the financial services sector. R3CEV is a distributed database technology firm. Juzhen works with the China Ledger Blockchain Consortium while monitoring occurrences in the West including the fabrics of Hyperledger and Corda products of R3.
According to the Director for Overseas Marketing of Juzhen (Ada Xiao), their company is in the process of designing products based on Juzhen’s perception of members’ business ventures and requirements. She also explained this technology will hype innovations in the aspects of biometrics or biological data, privacy and access control. Juzhen Financials collaborated with the China Ledger group and its own clients to test and improve the technology.
The company will utilize its product as core. At the same time, it plans to build all apps on top of said creation. Ms. Xiao assessed Juzhen Financials will make available a beta version of said product in the 2nd quarter. The ultimate goal is to circulate a commercial offering before 2017 ends. Lilin Sun, one of the pioneers of Union Pay (China) heads this start-up. It was able to raise $23 million for building clearing and payment processes that use the DLT.
The Series (A) funding was initiated by Wanxiang Holdings with support from Fenbushi Capital, an investment subsidiary that focuses on Blockchain. It marks the most substantial investment round that a Blockchain start-up from Asia raised. Juzhen has vantage position in teaming up with banking entities for potential solutions in post-trading. Prospective markets include brokers and dealers; clearing houses; exchanges; and, caretaker banks, according to data released by Coin Desk.
The objectives of Juzhen may be compared to global conglomerates such as Digital Asset Holdings of New York and Clearmatics of London. The chief executive officer of Juzhen Financials believes China requires its own solutions provider. With regards to infrastructure, the platform takes longer because of engineering and the need to understand the culture. It is important for Juzhen to become familiar with the Chinese market correctly.
Background on Juzhen
The company was established in 2014. Since then, it has been working to find out how these distributed technologies can provide answers to issues in financial markets of China. This was prior to Juzhen’s shifting its focus on the Blockchain platform. Mr. Lilin revealed he has long been fascinated by peer to peer technology and its relevance to finance. This started with the use of the E-Donkey network, which is a file-sharing service developed by Jed McCaleb.
McCaleb is the founder of Ripple and Stellar. The first is a real-time gross settlement system, remittance network and currency exchange. It is built on the following; Consensus Ledger, Distributed Open Source (Web Protocol), and Native Currency (XRP). Stellar is an open-source protocol mainly for value exchange. There are many errors in daily post-trading. With Blockchain, it is not difficult to balance. The process is also faster and more accurate.
Lilin declared that Juzhen sees traction with its designs as a result of growing interest in the platform among companies based in China. Juzhen and China Ledger both attended the 2nd Global Blockchain Summit held in Shanghai from September 19 to 24 (2016). The presentation was made by Wanxiang Blockchain Labs and Ethereum Devcon. This is a worldwide initiative to unite networks on Hyperledger and Blockchain.
Advantage of China
The aspirations of Juzhen Financials are really large-scale. Yet, Lilin is positive on its prospects considering that China proposes an obliging regulatory climate for start-up enterprises. China pushes innovation before it decides on the most effective regulations that should be implemented. It is the opposite in the United States where regulations come first. He reiterated comments from executives of Circle, also a Blockchain start-up and Peer to Peer technology firm. It is the reason mobile payments progressed in China but struggled in other countries.
The strategy of Juzhen in dealing with regulatory authorities in China is to cooperate with them but maintain a distance while scaling offerings. The company talks to several government agencies and take part in a number of discussions as well as workshops. Such comments follow new public declarations from financial entities operating in China after they invoked cooperation with regulators. This was meant to help promote applications of said technology.
Additional funds imply that Juzhen can allocate extra resources for manpower. However, this also indicates it must strive to deal with technological restrictions of the Blockchain platform which remain a big concern today. The company will continue to spend for research on Cryptography. In the meantime, financial institutions in China and elsewhere are apprehensive about secrecy matters. Technological solutions for this concern are still being researched.
Juzhen is also planning to subsidize academic studies on the subject of financial cryptography as part of these efforts. Lilin said his company reached out to 10 groups from different universities to offer ideas so they can gather more ideas on this subject. He believes it is possible to discover solutions by way of hardware use in the DLT. Lilin is determined to explore these crossroads as Juzhen proceeds further with its undertaking.
The navigation will surely use up more time, finances, efforts, and patience but it is essential to prove the effectiveness of this novel technology. Juzhen is willing to wait since prospects are becoming brighter day by day.
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