The Chinese government has allocated additional funding for a blockchain financial transaction platform developed by the country’s central bank.
The People’s Bank of China (PBoC) is to receive 32.35 million yuan (around $ 4.7 million) in “special financing” from the government. This will be extended over a three-year period for research and development of the project.
Officially known as the Blockchain Bay Area Trade Platform, it is meant to streamline transactions between banks and companies. The system stores data on orders, logistics and transactions. It also gives regulators the ability to monitor these activities more closely.
The main advantage is that small and medium-sized enterprises (SMEs) have access to more sophisticated financing instruments.
The blockchain financial transaction platform was launched in 2018
The commercial financing platform is available for Shenzhen-based businesses and is developed by PBoC Digital Asset Research Laboratory. A number of commercial banks, including Bank of China, Ping An and Standard Chartered, were invited to test the platform when it was launched in September 2018.
In January, Xinhua reported that the platform was used by a network of 38 banks, with total combined volumes exceeding 90 billion yuan ($ 13 billion). The new financing from Beijing is expected to help PBoC boost the adoption of its commercial financing platform between companies.
New development opportunities
A McKinsey report said the platform could “create significant new opportunities” for banks, SMEs and service providers. In addition to lower interest rates, analysts estimate that loan approval times could fall to 20 minutes.
Chinese President Xi Jinping said in the autumn of last year that the country must “seize the opportunity” when it comes to blockchain technology. Its recommendation has contributed to increased government investment and development in the field of new technologies.
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