China’s first blockchain application platform for electronic company seals went live in Hangzhou on Friday, built using Ant Group’s Blockchain as a Service, the Alibaba-affiliated fintech giant said in a press release.
Why it matters: Official company seals are the cornerstone of China’s corporate bureaucracy, required to validate corporate documents such as contracts. A forged, or stolen, seal can allow someone to take actions on the company’s behalf in a form of corporate identity theft.
- Electronic seals have carried the legal validity of physical seals since 2015, but they are issued by different government agencies with little standardization. This makes management and traceability of the e-seals difficult and risks forgery, Ant Group said.
- On top of that, companies are required to perform cumbersome bureaucratic tasks, such as keeping records of when a seal is used.
- The platform is likely to make corporate management a lot easier, ensuring the authenticity of electronic seals on a tamper-proof chain.
- The move comes at a time when three high-profile Chinese tech companies are fighting over official seals.
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Details: Hangzhou-based companies can obtain a blockchain seal by applying on a platform, available through both government portals and Alipay.
- The chain will offer tamper-proof, reliable electronic seals.
- The blockchain platform will be linked to Zhejiang province’s existing e-seal system, as well as Hangzhou’s City Brain, Alibaba’s smart city project in its hometown.
- At first, the platform will be available only to companies registered in Hangzhou, the capital of Zhejiang province.
Context: Since Chinese President Xi Jinping praised blockchain in October 2019, China’s local governments have been pushing blockchain technology in governance.
- Just last week, the city of Beijing unveiled an ambitious plan to use blockchain in government services, including cross-border trade, real estate, and banking.
- In the last couple of months, physical seals have been at the center of corporate power struggles, since control of a seal allows someone to issue official-seeming documents. At Bitmain, the world’s largest bitcoin rig makers, two co-founders fighting for control produce documents stamped by different seals. Each claims his seal is the one that represents the company.
- Hangzhou is often somewhat ahead of other cities in integrating technology in city governance, often in partnership with locally headquartered tech giant Alibaba.
- The company launched the Hangzhou City Brain in 2016, which big data it law enforcement, traffic management, and health services, among other areas.
- Ant Group, formerly known as Ant Financial, is Alibaba’s fintech affiliate. It operates China’s most popular mobile payments app, Alipay, and has invested in blockchain technology since 2015.