According to a recent report, nearly around 20 banks in Chongqing China, have used a blockchain-powered trade finance platform to process a total of $460 million in export trade financing after completing a year-long pilot program. This new trade finance platform has reportedly played a key role in completing an inter-border surgical mask related transaction during the recent COVID-19 outbreak. Another Chinese tech company successfully secured $153 million in funding for loans from China Construction Bank through this trade finance platform during the Coronavirus outbreak. Also, PBoC or the Bank of China secured $4.7 million in funding from the central government for this blockchain-powered trade finance platform for aiding in its research and development projects for the three next consecutive years.
The platform allows the stakeholders to verify tax documents, export receivables, and credit information instantly, thereby reducing the labor-intensive processes and red tape issues to a manifold.
The blockchain-powered trade finance platform is developed by the Chinese Foreign Exchange Regulator SAFE or the State Administration of Foreign Exchange. Two powerful cities in China, namely Shanghai Chongqing, began piloting the platform a year ago before the banks started utilizing the platform to facilitate international trade. Moreover, following the expansion of the pilot program, the Chinese President Xi Jinping, remarked that China should continue to accelerate the development of the indigenous blockchain technology. His remarks prompted more businesses to explore and mass adopt innovative blockchain technology.
Talking about this move, Lu Lei, the deputy head of SAFE, remarked,
We will gradually expand the scope of the pilot and the application scenarios of blockchain technology in cross-border financing and macro-prudential management. At the same time, (the government) will push forward a prospective study on foreign exchange reforms to deal with cryptocurrency and explore the construction of the foreign exchange regulation and technology system under the new situation.