China’s foreign exchange reserve regulator, the State Administration of Foreign Exchange (SAFE) is all set to test a cross-border trade finance blockchain platform. The news was announced by local media outlet CN Stock.
Per the report, the initiative of the development of the platform was taken by SAFE and has been completed in collaboration with Hangzhou Blockchain Technology Research Institute. The institute is also popularly known as China Banknote Blockchain Technology Research Institute.
The institute has completed the technical aspects of the project under the name of China Banknote Printing and Minting Corporation. The latter is an arm of the People's Bank of China (PBoC).
Presently, China’s import and export financing system is plagued with miniscule operational efficiency and is largely manual in nature. Moreover, data distribution systems are not in place and are asymmetrical. Thus, to resolve the aforementioned issues the firm has resorted to blockchain. It will purportedly allow real-time data sharing, and also improvise operational scope and significantly reduce costs as well.
The report further mentions that the platform can manage the firm’s entire trade financing operations. These will include verifying customer data, balances and prevent double spends.
SAFE further intends to expand the project in three major provinces. The provinces are Jiangsu, Zhejiang, and Fujian. Also, it will further expand it to cities Shanghai and Chongqing.
Once the pilot is completed, the platform will be promoted all over China. The report mentions that it will further add support other businesses and also attract banks to participate on the platform.
Back in September, 2018 a trade finance blockchain platform for cross-border trading across Guangdong, Hong Kong, and the Macau Bay Area was initiated. The platform was backed by PBoC.
In August 2018, Bank of China entered into an alliance with financial services corporation China UnionPay (CUP) to explore applications of distributed ledger technology for payment systems. In lines with the initiative, CUP was purported to be built as a singular port for mobile integrated financial services. Wherein cardholders can use a QR code to either transfer, send and trade on a cloud flash payment app.
Also, in January 2019, the China Banking Association ( CBA) announced that it will launch a blockchain-based platform to improvise on efficiency across the sector. Reportedly, HSBC, Bank of China and Ping An Bank signed up for the project. United Nations Development Bank agreed to sponsor the project with several banks lined up.