When Chinese financial giant Ping An joined the blockchain consortium led by R3CEV last week, the group added more than just a new member – it effectively integrated with a gateway to the world’s second-largest economy.
With a $90b market cap, the company has 27 subsidiaries across a wide range of industries, including life insurance, banking and securities.
But when it came to working with blockchain tech, the company, which has assets of more than $765b according to the company’s own numbers, didn’t want to do it alone.
So, earlier this year, Ping An’s chief innovation officer, Daniel Tu, called up R3CEV’s global managing director, Clive Cooke, to express his interest in joining the organization. To date, more than forty financial institutions worldwide have become part of the R3 consortium.
Tu said in a new interview that he’d been updating the company’s leadership on bitcoin and its underlying blockchain since 2013, and had received a “mandate” from his boss to test which aspects of distributed ledgers could be applied to Ping An’s subsidiaries.
Tu told CoinDesk:
“What I thought was important was that all of these business lines at some point or another could be potential applications. Given that R3 is all about collaboration, and you can’t do it by yourself, the idea was to work with other institutions and compare notes.”
Founded by current CEO Ming Ma in 1988, the company employs 1.3m people and is the 20th largest company in the world, according to a recent Forbes ranking.
Coming together
Though Cooke says he had not heard of Ping An at the time, he said it quickly became apparent that the financial institution could play a crucial role in the consortium’s plans to help integrate aspects of the technology into a wide range of services.
Cooke told CoinDesk:
“Ping An is not just a financial institution that wants to know how to incorporate new technology into its business. Ping An is an ecosystem in its own right. Within China they have a network of their own as R3 has a network of its own.”
In interviews, both Tu and Cooke described an early meeting between the two sides, which came shortly after Cooke joined R3 following seven years as CEO of City Index Ltd.
Tu called on Cooke, who coincidentally was already set to travel to Korea, to express his company’s interest in joining. Two weeks later, Cooke said, he was being “whisked away” in a Mercedes to meet with Ping An’s founder in person.
Cooke described entering Ping An’s “cathedral-like” building and meeting with the executive in his personal office. Cooke and Ma were each handed a pair of earbud headphones and translators sitting in the corners of the room helped the two men have a conversation “in real time,” speaking in English and Chinese respectively.
While Cooke says R3 had been approached by other Chinese financial institutions prior to this meeting, those firms were largely interested in consultations about how distributed ledgers function.
But in the case of the Ping An meeting, Cooke suggested that shortly after the meeting began, the two sides had taken to carving out ideas on a nearby whiteboard.
He explained:
“It’s almost as if [Ma] has a white board follow him around. Sure enough, 25 minutes into our conversation out came the pens and out came his plans for how distributed ledgers are going to change the way things are done.”
The blockchain project
Since the formal launch of the partnership on 24th May, Tu and the co-leader of Ping An’s blockchain initiative, Jessica Tang, have assembled a team of about 15 people from Ping An’s technology and finance divisions, as well as several chief technology officers from the conglomerate’s subsidiaries.
While Tu didn’t go into specifics about the kinds of projects being undertaken by Ping An’s internal blockchain team – he indicated that the company has at least two proofs-of-concept under development – he did suggest that staffers are moving aggressively to learn about the technology.
“We just want to make sure we shorten the learning curve for our people,” said Tu. “We’re very mindful of where blockchain can take us but we’re also very practical.”
According to Tu, the People’s Bank of China, the country’s central bank, and government regulators are all “following blockchain very closely with “think tanks” and “quasi-government blockchain-related firms” monitoring both domestic and international developments.
The remarks are notable given recent developments in the country. Shanghai-based Wanxiang Blockchain Labs has launched a new initiative, dubbed ChinaLedger, to build a blockchain protocol with 11 regional exchanges. This comes as the Chinese central bank weighs several approaches to developing its own form of digital currency.
Tu added:
“It is a highly regulated industry. We have to be nimble we have to be quick, but we also have to be compliant.”
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