Chinese Bank Giants Tap Blockchain in Trade Finance Efficiency Boost
The platform was announced last week while the organization is in the process of rolling it out for live usage after several pilot programs aimed at improving the efficiency and security of trade finance transactions.
Lending technical support are Chinese fintech firms including PeerSafe, a Beijing-based startup focusing on distributed ledger technology and a member of the Hyperledger consortium.
The CBA said in the statement that it has completed two pilots for issuing a letter of credits (LoC) and asset-backed securities, with participation from the Industrial and Commercial Bank of China and China Merchants Bank.
“The launch of China’s trade finance blockchain has brought together the trade chain of different banks to make cross-bank transactions much faster, safer and more realistic,” Fang Xiao, vice president and head of industrial and commercial finance at HSBC China, was quoted as saying in a news report on Thursday.
Going forward, the CBA said it plans to include more small and medium-sized banks, as well as customs and taxation agencies to the platform.
The trade finance sector is increasingly looking to adopt blockchain technology for improved operations. In September, China’s central bank deployed the “Bay Area Trade Finance Blockchain Platform” across financial institutions in the southern city of Shenzhen.
The Hong Kong Monetary Authority also announced the launch of a live blockchain trade finance platform in November last year.
More recently, HSBC India and ING Bank, Brussels, facilitated the trade finance transaction on R3’s Corda blockchain platform, for India-based oil and gas conglomerate Reliance Industries and US-based global chemical distributor Tricon Energy.
China financial district image via Shutterstock