The central bank of China, People’s Bank of China (PBoC), has acquired special funding worth $4.7 million for its trade finance blockchain project, according to a media report on March 9. The funding which will be dispensed over the course of three years has been allocated for key research and development projects.
The PBoC initially disclosed the trade finance blockchain project in Shenzhen back in September 2018. Indeed, the project is designed to expedite transfers and facilitate secure information sharing through the Digital Ledger Technology (DLT); since the information store on the blockchain is not alterable. The platform will be used between the involved banks, businesses, and government departments.
PBoC’s trade finance blockchain platform is efficient
In fact, by mid-January this year, it is estimated that the trade finance platform had processed approximately $12.4 billion worth of transactions for the 38 banks and nearly 1,900 firms; that initially signed up for the platform.
Moreover, according to local media outlet Xinhua, the platform has massively slashed the amount of time taken to see out trade financing. Initially, the process could take up to ten days to complete; however, by using the blockchain platform it takes roughly 20 minutes to complete the process. In addition, the platform has also reduced the cost of corporate financing by about 6%.
Blockchain adoption escalates in China
Ever since the public endorsement of blockchain technology by President Xi Jinping; the country has deployed the technology on an increasing number of applications.
Just recently this month, the municipality of Beijing introduced a parking electronic invoicing system based on the blockchain. The city’s tax authority stated it will promote paperless invoicing; by launching the blockchain-based invoicing system to all parks within Beijing. In addition, it noted that it intends to implement blockchain invoicing to other sectors in the future.
The PBoC’s trade finance blockchain project is regulated by the Chinese central bank’s Digital Currency Research Lab, the Chinese Academy of Sciences, major universities in China and top local banks.
Featured image from Bloomberg.com