China Directs Blockchain Use in Banking, Tax for SME Financing

Chinese regulators have issued a joint policy notice directing banks and tax authorities to integrate blockchain and privacy computing technologies into their operations, aiming to streamline data sharing and boost financing access for small businesses nationwide.

The directive, released by the State Administration of Taxation and the National Financial Regulatory Administration, calls for standardizing information exchange between tax bodies, financial institutions, and enterprises. This move seeks to address long-standing information gaps that hinder credit assessments, particularly for small and medium-sized enterprises struggling to prove their financial health without revealing sensitive data. By using blockchain for secure, auditable record-keeping and privacy computing to analyze information without exposing raw files, the framework targets reductions in document fraud, such as falsified electronic invoices, which have undermined lending trust in the past.

The policy aligns with a broader national strategy outlined in a January 2025 roadmap from the National Development and Reform Commission, which mandates blockchain integration into data infrastructure with full...