A new trade and finance blockchain platform, supported by the People’s Bank of China (PBoC), has began its official pilot operations in Shenzhen.
This is according to local news outlet 21jingi.
The “Guangdong, Hong Kong and Macao Dawan District Trade Finance Blockchain Platform” seeks to deliver a blockchain-powered ecosystem for cross-border trading across Guangdong, Hong Kong, and Macau Bay Area. The platform is being jointly endorsed and controlled by the PBoC’s Central Bank Digital Currency Research Lab and the Central Bank Shenzhen Central Branch.
The report cited Xu Honghui, vice president of the transaction banking division at Ping An Bank, as saying that:
“Previously, trade financing costs for micro- to medium-sized enterprises were about 7 percent to 8 percent, but the blockchain system could cut the cost to less than 6 percent.”
Honghui also said that the more data that is added to the platform — which includes credit, business, third-party assessment, and judicial department data — “the safer the blockchain.” The platform could possibly be linked to the government supervision and logistics information systems to address issues of information asymmetry and insufficient data sharing, both domestic and overseas.
The first stage of the platform’s trial operation is being operated to offer supply chain financing, seeking to undertake hurdles that face small and micro enterprises whose credit accumulation does not have the sufficient data to credibly secure financing from financial groups.
Hou Weirong, general manager of China Merchants Bank’s transaction banking department, explained:
“Verifying the authenticity of trade background is an important part of business compliance. The information between banks is isolated […] to solve the problem of risk control, especially when it comes to receivables deduction [as well as] if there is a problem in the supply chain, the bank has no real-time information. This can only be solved through financial technology.”
The new platform is looking to leverage the transparent and immutable properties of blockchain to facilitate a regulatory system for trade finance that attains “dynamic and real-time monitoring of various financial activities.” In one instance, the system could prevent the same accounts being used to “maliciously obtain” multiple loans from different institutions.
- Waste Management Firm Launches Blockchain Platform in Sharjah 18 February 2019
- Police Apprehend Suspects in $14 Million Crypto Scam 18 February 2019
- Crypto Markets Seeing Wave of Green 18 February 2019
- New Payment App of Rakuten to Support Crypto? 18 February 2019
- Regulated ETH Futures Would Result in More Robust Market, Says ErisX 18 February 2019