Opinion: Blockchain Should Stay Out of Currency and Finance

Blockchain was created years ago, but it wasn’t real-world applications that brought it to the market, but brainstorming — hundreds of international seminars over blockchain have been held.

However, no matter how much market participants or experts proselytize about the technology, it is not really suitable for the financial sector. People should keep an objective and sober mind toward so-called innovation in controlling financial risks.

I have three points to make about blockchain. First, blockchain cannot play a role in currency, because its biggest feature is decentralization. Policymaking over currencies is one of the major economic roles of governments, and they must monopolize the issuance of currencies. Such centralized power should not be undermine for the time being.

Second, blockchain technology isn’t a fit for the financial market. From what we can see in the current market situation, blockchain doesn’t seem to be all that useful for raising the efficiency of financial operations.

Third, blockchain may find applications in the real economy and real world. For example, its ability to prevent data from being altered retroactively may come into use in art or archeology.

Why it doesn’t fit the financial sector? All new tech meets doubt and cynicism at first. All apart from blockchain, which doesn’t seem to have experienced much scientific questioning. It has been mythologized and exaggerated. But years have passed, and we haven’t heard about companies or countries that have really used blockchain to solve problems or create new value.

If there are few examples of real-world application for a technology and people almost universally applaud it, there must be something wrong — it’s likely just hype.

Blockchain should stay away from finance. Although China has been stepping up its efforts to control financial risks, blockchain should not be considered a useful tool, neither in terms of enhancing financing efficiency or risk…

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