China continues implementation of the blockchain technology at the state level and creates a new financial and trade framework with the support of the Central Bank of the country.
The people’s Bank of China (PBOC) recently began testing a blockchain platform called Guangdong-Hong Kong-Macao Great Bay Area Trade Finance in Shenzhen, Guangdong province.
Li Chao, who is a financial analyst from the Beijing blockchain company iResearch, told how new development can help the economy and business in the country:
“China imposed a ban on activities associated with virtual currency, but the blockchain from the point of view of the authorities, is sufficiently advanced technology that has been adopted by many countries. PBOC creates at this moment the site based on a distributed registry that will provide more efficient and secure system for the exchange of information between financial institutions, and is expected to reduce the time and cost of financing small and medium business”.
As for saving time, Chao explains that to complete the traditional rounds of financing typically requires two weeks. Using the blockchain, the process will take about 20 minutes. This is quite a drastic reduction in time, which in turn will result in lower costs.
Xu honghui, Vice-President of the Department of banking operations Ping An Bank, explained how the technology is useful for businesses:
“Previously the cost of trade Finance for small and medium enterprises accounted for about 7%-8%, but the blockchain-the system can reduce the cost of these transactions to 6% and below.”
We will remind, last week the Chinese government Agency responsible for social services, announced plans for the introduction of blockchain technology for the modernization of the current system of tracking the charitable activities with the aim of increasing transparency in the area of public donations.
It is also worth noting that recently one of the largest private commercial banks of China Zheshang Bank, issued securities in the amount of 66 million dollars on a private blockchain platform.