China’s adoption of blockchain technology has been rampant, to say the least. Spurred by a government declaration to integrate the technology, both private and public organizations in the economic superpower have jumped at the opportunity to work with the technology.
The latest in such development is coming from the China Zheshang Bank, a national commercial bank that is based out of the Hangzhou region.
Improving SMEs Access to Direct Funding
China Banking News reported recently that the national bank had used blockchain to issue an asset-backed commercial paper (ABCP) under a pilot program set up by the National Association of Financial Market Institutional Investors (NAFMII).
Primarily, an ABCP is a short-term investment product that financial institutions issue to help their institutional clients to meet some of their operational objectives. The short-term product usually has a maturity date between 90 and 270 days, and they’re backed by the physical assets owned by the issuing company.
Dubbed the “Lianxin 2020 Lianjie First Phase Asset-backed Commercial Paper,” this investment product has a maturity period of six months, although the bank has yet to specify the date of the next issuance. According to the report, an official from the NAFMII noted that blockchain would help provide enterprises with a direct channel to markets and improve their access to direct business financing.
The Lianxin ABCP will primarily ensure that small and medium enterprises can easily get the financial assistance that they need. Amongst other things, it will improve their accessibility to direct financing sources and provide a wider pool for debt insurance.
An official also pointed out that the companies will be able to use blockchain to optimize their supply chains and access other partners who can help in some way or the other.
Blockchain is Transforming China, One Application at a Time
As explained earlier, this move is just the latest on a string of blockchain applications that are transforming both public and private life in China. Late last month, e-commerce conglomerate Alibaba Group reportedly signed a deal with the China Merchants Port, the country’s biggest port operator, to develop a multifaceted blockchain platform.
As local media explained, the blockchain platform will allow various aspects of a business transaction to conduct contactless digital import and export operations. Beneficiaries will reportedly include sellers, buyers, tax officials, logistics companies, and banks.
All partner companies will help usher in a wave of blockchain integration into the port industry. The objective, per the report, is to become the first blockchain-based digital port in the world.
In terms of public life, China Quality News reported last weekend that Suzhou, a city located west of Shanghai, is looking to develop a blockchain-powered pilot program that will provide various notary services.
The news source explains that the new platform will be created by the Suzhou Municipal Bureau of Justice and the Suzhou Municipal Market Supervision Bureau. It will reportedly cover various aspects of human life, including but not limited to life, personal freedom, health, and property rights.
Dubbed the Suzhou Notary Chain, the platform will allow the administrative law enforcement unit to conduct online notarization services. The agencies will also be able to conduct their entire processes through shared files on a blockchain-powered cloud platform.