China pushes blockchain for bank lending to boost small business

China’s top financial regulators are directing banks to adopt blockchain technology, aiming to expand lending for small businesses and improve data transparency nationwide.

"Banks and taxpayers should standardize data sharing and reduce information asymmetry," the State Administration of Taxation and National Financial Regulatory Administration said in a joint policy notice issued Monday.

The directive calls for using blockchain and privacy computing to upgrade the existing “bank-tax interaction” model. It urges banks to refine credit models and boost financing for enterprises with strong tax payment histories, improving credit approval efficiency.

This move is a key part of China's broader strategy to build a national blockchain-based data infrastructure by 2029, a plan expected to attract 400 billion yuan (about $58 billion) in yearly investments, according to the National Data Administration.

The policy reinforces Beijing's dual-track approach to digital assets: embracing the underlying blockchain technology while strictly prohibiting cryptocurrency speculation. In October 2019, President Xi Jinping called blockchain an important “breakthrough” for core technology innovation and urged its integration into the real economy. Following this, initiatives like Shenzhen's blockchain-based electronic invoice system were expanded in April 2021.

However, just five months later, China issued a sweeping ban on all cryptocurrency transactions and mining operations. Despite the prohibition, the nation remains a significant force in crypto mining. Data from Compass Mining shows China accounted for 11.7% of the global Bitcoin hashrate as of January 2026, ranking third worldwide. The new directive focuses solely on enterprise applications, separating state-sanctioned blockchain use from the decentralized cryptocurrency markets.

This article is for informational purposes only and does not constitute investment advice.