Banking News

China’s Shenzhen district uses blockchain for $1 billion of tax invoices

blockchain mobile invoices

Today, China’s state-run press agency Xinhua reported that the Shenzhen Taxation Bureau issued over 10 million blockchain invoices. Dubbed as ‘Shenzhen Speed’, the blockchain invoices are being used on-demand without the need for purchasing physical tax invoices from authorities.

Situated in South China’s Guangdong province, Shenzhen first issued a blockchain invoice with support from internet giant Tencent. The technology has since been deployed for China Merchants Bank, Ping An Bank, Wal-Mart, NUS Pharmacy and WeChat Payments Merchants. At present, over 7,600 companies in Shenzhen have access to the blockchain invoicing system which has processed over 7 billion yuan ($994 million) since its launch last year.

Blockchain invoicing is beneficial for companies as it reduces the time and cost of the process through automation. From a consumer viewpoint, if they want an invoice, for example, to prove travel expenses, it means it’s not necessary to queue.

From the government’s perspective, the benefit of using blockchain is to reduce the number of fraudulent invoices used as tax deductions or for trade finance. It also enables it to improve the supervision of the invoice process and business in general.

In the face of a developing blockchain environment in the region, Tencent announced it is working with the China Academy of Information and Communications Technology and Shenzhen’s tax bureau to draft an international standard for blockchain invoices. The trio will be responsible for developing, discussion and revision of the standard before it is launched. The set up of the project, ‘General Framework of DLT-Based Invoices’, has been approved and supported by UK, Switzerland, Sweden, Brazil and China’s State Administration of Taxation.

The announcement was made at the International Telecommunication Union-Telecommunication (ITU-T) meeting where stakeholders agreed that blockchain invoices will be an essential aspect of a digital economy, and expressed the urgency of developing a standard.

“E-invoicing is an appropriate field for blockchain application probes and trials currently, which could in turn promote tech development,” Li Ming, director of the Blockchain Research Department at the China Electronics Standardization Institute, told the Global Times.

The announcement from Tencent comes soon after Chinese President Xi Jinping announced his support for developing blockchain in the country. Several blockchain projects are currently active in China and recently launched a nationwide blockchain service network (BSN).

WeChat developer Tencent is also exploring various blockchain applications. The company has a proprietary cloud-based blockchain-as-a-service, TBaaS, which currently supports Chinese consortium blockchain FISCO BCOS, Hyperledger Fabric, and its own protocol TrustSQL.

Last week, Tencent unit WeBank and Jingyou Technology announced that they are building a blockchain-powered automobile database.