China Banking Association Develops Blockchain Platform For Trade Finance
On December 29 the China Banking Association (CBA) announced the launch of a new blockchain-powered system dubbed “the China Trade Finance Inter-Bank Trading Blockchain Platform.”
The new platform is intended to improve activities related to trade finance, keep the Chinese banking industry at the forefront of the developing industry, and control financial risks.
According to the announcement, the new platform is being rolled out for live use after several pilot programs tested whether the new platform can properly function.
To date, at least 10 major Chinese banks – including the Industrial and Commercial Bank of China, the Agricultural Bank of China, and the China Construction Bank – have signed up to use the new platform and completed the first two network tests. According to the announcement, the platform has been used to complete at least one “inter-bank domestic letter of credit chain” between Industrial and Commercial Bank of China and China Merchants Bank.
Fang Xiao, vice president and head of industrial and commercial finance at HSBC China was quoted as saying, “The establishment of this inter-bank platform can be described as extraordinary, opening up barriers between different banks and realizing the interflow of information flow.”
The Chinese banking sector has been experimenting with blockchain technology for some time now. In March 2017, China’s Ganzhou Bank announced the implementation of a blockchain-powered billing platform intended to “increase reliability and speed of transactions for financial services within the country.” Additionally, in July 2018, the Industrial and Commercial Bank of China was seeking a patent for a blockchain-backed system that could be used to improve the process of exchanging financial assets.