Companies in Hangzhou can now access their electronic seals through the Ant blockchain.
Last week China implemented an electronic seal system which uses Ant Group’s blockchain – company seals, or chops, which are an integral part of the Chinese corporate world. The seal represents the business and gives considerable power to whoever holds it.
A seal is mandatory for any business to operate, since it is used to sign contracts, official company letters, and any legal documents. The integration of company seals into blockchain is a big step forward for this type of technology in China.
Individuals with malicious intent could forge or obtain the seal illegally and could ultimately represent the company, taking action on its behalf. The electronic seal was introduced in 2015, and was initially regulated loosely, revealing a huge vulnerability to forgery.
What part does blockchain play?
Through the implementation of blockchain technology, the seals are encrypted and can be accessed only by authorised individuals. Therefore, they are virtually tamper-proof – and earlier security concerns are addressed directly.
Blockchain technology could solve many of the issues that the traditional corporate processes face by reducing an overwhelming amount of paperwork and labour with minimal human error.
It was recently reported that the implementation of blockchain technology in Beijing has eliminated up to 40% of paperwork and fast-tracked economic recovery from the Covid-19 crisis.
The blockchain seal platform is currently only available for businesses based in Hangzhou and these companies must obtain them through government portals or Alipay.
Part of a national agenda
In 2019, President Xi Jinping featured blockchain development as one of the driving forces of Chinese technological advancements. Ever since then, its development and use has been prominent in the country.
The blockchain seal system is a positive step towards a largely integrated China, with Beijing reporting up to 140 government services in operation with integrated blockchain.
If the blockchain seal is to be successful, there would be a countrywide application of the system. China is considering licensing this technology to its neighbouring Asian countries which use similar physical seal systems.
One issue that China may face is the low level of trust that many of its neighbours have for the CCP, and Chinese technology. Nations which have exposure to South China have faced unrelenting harassment from Chinese interests both public and private, and this could prevent China from selling its technology to other nations.