China Banking Association pushes trade finance on blockchain
In the year of the pig, China is going big with the launch of an interbank blockchain platform for trade finance.
With blockchain as popular as free alcohol at a fintech conference, the China Banking Association (CBA) is getting in on the act.
To that end it has officially launched its “China Trade and Finance Interbank Trading Blockchain Platform”. Not the catchiest (or briefest) name, but its intentions are clear.
The CBA says it wants to prevent and control financial risks, and speed up financial reform.
The platform provides standardisation of transaction information of interbank trade financial products, “laying an important foundation for building a new trade finance ecosystem and improving the efficiency of financial services”.
According to the association, the process has completed the first and second phase of the network test, forming a technical standard and business product standard.
The CBA explains that the platform is based on a distributed data storage, point-to-point transmission, consensus mechanism and encryption algorithm of blockchain.
Up to 29 December, ten banks, comprising Industrial and Commercial Bank of China, Agricultural Bank of China, China Construction Bank, Bank of Communications, China Merchants Bank, China Everbright Bank, Shanghai Pudong Development Bank, China Postal Savings Bank, Ping An Bank, and HSBC Bank (China), completed the network test.
The platform is now in operation, and ICBC and China Merchants Bank have completed the verification of the first interbank domestic letter of credit chain.
This year, the CBA plans to expand the platform coverage, and wants the majority of small and medium-sized banks to join.