China’s tax and financial regulators are steering banks toward blockchain technology as a tool for sharing tax data and improving credit access, with small and medium-sized enterprises at the centre of the push, as per local media reports.
A joint policy notice from the State Administration of Taxation and the National Financial Regulatory Administration called on banks and taxpayers to standardize data sharing to reduce information asymmetry between tax authorities, banks and enterprises. The agencies also suggested improving credit models, enhancing approval efficiency, and increasing the supply of financing services to “honest, tax-paying enterprises.”
The initiative builds on a framework that has been in development for years. As early as 2019, China’s State Taxation Administration and banking regulators formalized a bank-tax interaction model designed to help private, small and micro-sized businesses convert their records as compliant taxpayers into access to bank financing.
The latest notice adds a technological dimension to that model, with blockchain expected to allow tax authorities and lenders to share records in a tamper-resistant environment, reducing dependence on traditional paperwork and making risk assessment and loan approvals faster.
China is currently aiming to build a unified national data market and develop the digital economy, with the basic framework scheduled to take shape by 2029. Shen Zhulin, deputy director of the National Data Administration, had said at a January press conference last year that China expects blockchain-based data infrastructure to attract Chinese Yuan 400 billion (USD 58 billion) in annual investment.
Meanwhile, authorities in the country have maintained the nationwide ban on crypto trading and mining introduced in 2021. They also expanded restrictions this year bringing into its regulatory ambit stablecoins and tokenized assets as well. The country’s embrace of blockchain as financial infrastructure therefore runs in a separate lane from digital assets entirely, with regulators drawing a firm line between the underlying technology and the crypto markets built on top of it.
