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.

READ MORE: INSIGHTS | Corporate intrigue triple header

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.

Eliza Gkritsi

Eliza is TechNode's community listening reporter at the Shanghai office. She acts as a link between the editorial team and TechNode Squared members. She previously worked as a reporter for WikiTribune...