China Construction Bank, one of the largest Chinese commercial banks, has expanded its trade finance blockchain platform with new abilities, including cross-chain and inter-bank transactions, as trading volume surpasses $53 billion. The platform provides factoring and financing services that allow exporters to receive cash payments in exchange for selling their medium and long-term receivables at low prices.
$53.5 billion transactions and counting
Launched in April 2018, the platform has to-date processed over $53.5 billion transactions between exporters, banks and non-bank financial institutions, he said.
The platform digitises commodities trade and financial services
between over 50 CCB branches and 40 banking institutions, including both
state-owned and foreign banks, commercial banks and non-bank platforms. The
CCB’s project has been in the works for some time. In 2017, the bank claimed to
be the first to use blockchain for domestic letters of credit, forfeiting, and
international factoring. It had managed $106 million and 20 participants.
There are new features in factoring, cross-chain connectivity, and improvements in efficiency. The CCB’s platform is just one of many blockchain trade finance initiatives in China. The central bank run ‘Bay Area Trade Finance Blockchain Platform’ reached USD 4.5 billion earlier in 2019.
The launch is the bank’s latest effort to increase the efficiency of its banking system for export trade financing with blockchain technology. It completed the debut blockchain-based trading via a factoring transaction in January 2018, according to a statement from the company.
“The move is in line with China’s economic plan to promote trade amid the One Belt One Road Initiative and help grow the real economy in the country,” the bank said in the statement.
Leading the front with Blockchain
China, is not only poised to regain their economic superpower
status, but has also been blazing ahead with many blockchain adoption. All four
largest commercial banks in China have launched blockchain-based financial
services initiatives in the past two years.
Industrial and Commercial Bank of China, the world’s largest bank in terms of total assets, used its blockchain-enabled financing platform to assist small and medium-sized firms with processing factoring transactions. Approximately 1,300 users have conducted transactions worth $6.4 billion on ICBC’s platform during the first nine months since its launch in February 2018.
Bank of China conducted its first blockchain-based cross-border transfer to South Korea in US dollars last August, while Agricultural Bank of China helped farmers with online trading by using its e-commerce blockchain financing system in August, 2017.