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Shenzhen Stock Exchange Could Follow Shanghai after Blockchain Move

Tim Alper
Last updated: | 1 min read

The Shenzhen Stock Exchange has become the latest major exchange to indicate that it is ready to begin blockchain-powered trading – after “re-developing and building” a blockchain-based equity registration and custody platform for Beijing’s regional equities market.

The Shenzhen Stock Exchange Square. Source: Adobe/WR.LILI

The exchange has co-built a blockchain solution for trading in unlisted private-sector companies for use in the capital.

Yesterday, reported that the Shanghai Stock Exchange, China’s other major internationally recognized exchange, is set to begin a pilot for its own blockchain-based trading platform in conjunction with one of China’s most powerful financial regulators, the China Securities Regulatory Commission (CSRC).

Per China Daily, the CSRC has now said that the Shenzhen Stock Exchange is ready to co-launch the Beijing Regional Trading Center’s new platform after lengthy “blockchain technology application cooperation” on a platform capable of dealing with “unlisted corporate equity registration and [custody-related matters].”

The Shenzhen Stock Exchange is one of the biggest in the Asia-Pacific region, with a market capitalization of USD 3.51tn in 2019, and some 1,500 listings.

Earlier this year, the regulator invited the equities markets of five Chinese regions, including the capital, as well as Shanghai, Jiangsu, Zhejiang, and Shenzhen, to begin blockchain development and pilots for trading operations.

The Shenzhen Stock Exchange has been working with the Beijing-based body since 2017 and since summer this year on the new platform.

The organizations say that what they have co-built is essentially a regional equity market intermediary credit platform that will allow market intermediaries to share information using a blockchain network.

But with Shanghai now beginning its own trading platform pilot, which also makes use of blockchain technology, the CSRC has stated it could use the pilot as a “blueprint” for other exchanges – possibly including Shenzhen’s lucrative exchange.

The latter has already developed an offering it calls the Shenzhen Stock Exchange Financial Blockchain Platform for use in the Beijing project – and may look to integrate this with its own operations if its project in the capital proves to be successful.

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