Shenzhen, China’s technology capital, recently announced an index for 50 blockchain firms on its stock market. The index consists of 50 companies already listed on the Shenzhen Stock Exchange (SSE) that are involved in the blockchain industry. Each are ranked by the average daily market value during the previous six months, and the index will be updated twice annually.
The SSE made sure to do its due diligence prior to the launch of the index. They made sure each of the companies listed were actively involved in blockchain technology, as opposed to merely capitalizing on a trend.
Currently, the SSE’s market capitalization is valued at $3.12 trillion and is the eighth largest in the world and fourth largest in Asia. Thus far, blockchain has had quite an impact on the SSE. In March 2018, Lifesense, a healthcare device manufacturer, was suspended after the company announced its blockchain laboratory, which sent its share price soaring past the 10% daily limit.
Other major exchanges have also started to list indexes of cryptocurrency and blockchain companies. In October, NASDAQ, the second largest exchange, listed the AI-powered CIX100 index created by Cryptoindex, a crypto data provider. CIX100 utilizes a neural network algorithm that analyzes data across 100 cryptocurrencies, taking over 200 factors into consideration. Since its launch in May 2017, it’s seen a gain of +1100%.
With the proliferation of cryptocurrency, it’s clear that blockchain and digital currency are on the rise. These platforms offer a higher level of security, taking identity verification technology up a notch by incorporating encrypted wallets; an individual is far more likely to have their bank account compromised than their Bitcoin wallet, for example. It’s also appealing to users because there are less intermediaries involved in transactions, bringing costs down considerably and creating a deeper level of transparency.
Recently, China in particular has demonstrated a strong interest in decentralized ledgers. On the same day that the SSE announced its stock index, it also used blockchain to announce its recent bond issuance.
The Central Bank of China (which has its own cryptocurrency—CBDC) offered $2.8 billion in bonds to small businesses, and its blockchain will manage the two-year bonds. CBDC will use the blockchain to track interest payments and pay interests via its yuan stable coin.
“In the future, one would first treat blockchain as an accounting tool such that the issuance will become more efficient with lots of additional functionality,” Arthurine Xiang, the CMO of blockchain infrastructure firm Quarkchain, told Cointelegraph. “Of course, the benefits of blockchain do not stop there. With the use of smart contracts, users can pay and receive interests automatically. All in all, using blockchain allows bonds to be traded more easily and will improve the level of automation during the whole issuance process.”