Huobi Group and Nervos aim to rival Facebook’s Libra with new financial blockchain

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Chinese cryptocurrency exchange Huobi Group is partnering with enterprise blockchain startup Nervos to develop a new public blockchain dubbed “FinanceChain” to provide decentralized services to businesses.

The financial platform that will enable institutions, enterprises, and exchanges to create and deploy their own digital assets to compete with cryptocurrencies such as Bitcoin and Facebook’s newly announced Libra.

“More and more assets are being tokenized and moved to the digital world, including both native cryptocurrencies and traditional physical assets,” said Kevin Wang, co-founder of Nervos. “The financial industry is now at an inflection point, and together with Huobi, we’re well positioned to help it modernize its services for the decentralized future,” he added.

Nervos Network will provide the technology behind FinanceChain, which is part of a joint initiative to accelerate the future of decentralized finance, states the Hangzhou-based company in a press release.

“Huobi’s public chain is designed with the intention of becoming an infrastructure that supports global currency, assets and financial markets built on blockchain,” Leon Li, founder and CEO of Huobi Group, told TechNode. “From a strategic point of view, decentralized financial services are still in an early stage of development. The market demand is clear, however, and we believe this is a very definite business opportunity,” he added.

The industry is likely to undergo “far-reaching changes” in the future, he noted. Exploring public chain technologies and business models keeps the company innovative and serves as a strategic defense, said Li.

FinanceChain will allow players to deploy their own blockchains, tokenized assets, and decentralized financial services. Specifically, it will enable companies to host lending and payment services, run decentralized exchanges, issue stablecoins, conduct security token offerings (STOs), as well as other digital assets.

FinanceChain is set to open-source in the third quarter this year, before launching its testnet in the first quarter of 2020. Its mainnet is expected to come online in the subsequent quarter.

To ensure regulatory compliance, the platform will implement identity protocols such as Know Your Customer (KYC) verification to meet Anti-Money Laundering (AML) requirements. “Because Huobi plans to undertake regulatory and compliance initiatives such as KYC, AML and even bring regulators onto the platform, it is creating the framework and regulatory market conditions that will allow its enterprise users to issuIe their own digital assets and launch their own blockchain solutions in a compliant and ‘low risk’ way,” Ben Waters, Head of International Markets at Nervos, told TechNode in a written statement.

Facebook’s recently announced ambitious plan to launch Libra, a new digital currency for its apps, has catapulted cryptocurrency into the mainstream. The project has attracted a great deal of attention and controversy around the world, including in China.

In many ways, the new chain is similar to Facebook’s Libra. For example, they both aim to offer high-performance financial services with the goal of building a blockchain of regulatory compliance rather than looking to circumvent regulation from the outset like that of Bitcoin, said Waters.

One of the differences is that Huobi’s blockchain clearly focuses on the main trading and decentralized financial services market, while Libra focuses on the payment market. The Huobi chain targets blockchain users, unlike Libra which is designed for internet users. “Furthermore, it enables a range of assets including native digital assets and tokens, as well as the possibility for real-world assets to be linked onto the blockchain creating an extremely wide scope of use cases that Libra has no current intention of pursuing,” Waters added.

Nervos was founded in 2018 by a former researcher and developer at the Ethereum Foundation. Last July, the startup closed a $28 million funding round led by Polychain Capital and Sequoia China.

Founded in 2013, Huobi attracted a horde of Chinese retail investors and was at one point the largest digital asset exchange in China by trading volume. Beijing’s crackdown on cryptocurrency activities in 2017 drove the exchange to the more crypto-friendly Singapore.

Source: Technode

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