Pilot blockchain powered trade finance platform launched
(9 January 2019 – China) The China Banking Association (CBA) has announced the launch of the China Trade Finance Interbank Blockchain Platform aimed at boosting trade finance.
The CBA has announced the launch of a blockchain-powered platform aimed at improving trade finance and keeping the banking industry at the forefront of fintech developments. The pilot, which is expected to go live in 2019, involves at least ten major Chinese banks and, for the first time, a foreign bank - HSBC Bank (China). The platform was used by the Industrial and Commercial Bank of China (ICBC) and China Merchants Bank (CMB) to finish at least one “inter-bank domestic credit chain letter”, according to a statement from the CBA. The platform seeks to “improve the transaction mode, improve transaction efficiency, and ensure transaction security”.
In 2019, after the platform is running smoothly, the CBA plans to further expand the platform coverage. Among the consortium are banks from China’s Big Four commercial banks including ICBC, CCB and the Agricultural Bank of China. In March 2017, China’s Ganzhou Bank announced the implementation of a blockchain-powered billing platform to “increase the reliability and speed of financial services transactions within the country.” In July 2018, ICBC sought a patent for a blockchain-backed system that could be used to improve the financial asset exchange process.
“The launch of China's trade finance inter-bank trading blockchain platform has brought together the trade chain 'chain' of different banks, making cross-bank transactions much faster, and safer,” Fang Xiao, vice president and head of industrial and commercial finance at HSBC China, told state media. “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." He said the use of blockchain technology to promote trade finance was now part of a global trend and that figures from UNESCAP (the United Nations Economic and Social Commission for Asia and the Pacific) showed that trade-related document transmission through digital technology is expected to reduce transaction time by 44 percent and cost savings by 31 percent by 2021.
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