Introduction to Blockchain Invoicing in China

Following the trailblazing success in Shenzhen, Beijing has decided to embrace the future with a blockchain invoicing system. Launched by the municipal office of the State Administration of Taxation on March 2, this initiative is all about bringing transparency into a tax world riddled with under-the-table practices and fraudulent activities.

What’s the Fapiao Fuss?

In simple terms, “fapiao” translates to official invoices in China, which are issued by the tax bureau to validate purchases. However, not all fapiao are created equal. Many have become instruments for tax avoidance, fraud, and creative accounting. This blockchain system aims to put an end to the underground market for fraudulent fapiao—or as we like to call it, the “fapio-no-no” market.

How the Blockchain System Works

So what’s the secret sauce of this invoicing system? Enter blockchain technology, stage left. The adoption of blockchain means we are talking about:

• Smart Contracts: These are self-executing contracts with the terms directly written into code. Think of it as an invoice that automatically triggers payments.
• Encryption Algorithms: Because who likes their tax documents being hacked? Encryption will ensure that sensitive data remains under lock and key.
• Complete Traceability: Every transaction is recorded, and guess what? Once it’s on the blockchain, you can’t go back and mess with it!

The Role of the Government

The Beijing authorities are keen on promoting this progressive environment. The pilot program doesn’t shy away from its ambition. It uses a private or hybrid blockchain, ensuring that the tax department, invoice issuers, and recipients are on the same page. Remember those awkward moments trying to explain receipts to your accountant? Those days might soon be over!

What’s Next for Blockchain in China?

Xi Jinping and his team have been eager to explore the many “good applications” blockchain technology can provide. Since 2019, they’ve been digging deep into how blockchain can serve the state better. With an additional 30 million yuan invested by the People’s Bank of China into blockchain trade financing, one can only wonder where this journey will take us next. Spoiler alert: it may just lead us to some intriguing tech solutions for the ongoing pandemic!