China’s SAFE And Hangzhou Institute Create A Blockchain To Reduce Foreign Exchange Reserve Inefficiencies
China’s Foreign Exchange Reserves Regulator Develops DLT System To Reduce Inefficiencies
According to the local financial news CNStock, the State Administration of Foreign Exchange (SAFE) has been working on a blockchain system that aims at addressing inefficiencies in cross-border trade finance. In order to do so, SAFE worked with the Hangzhou Blockchain Technology Research Institute.
SAFE Creates Blockchain Platform To Tackle Inefficiencies
As per the report, these two institutions have been working together to build an open blockchain platform that uses multi-signature technology to keep transaction content private. Only the firms involved in a specific transaction will be able to see the necessary information. At the same time, regulators will also be able to view information such as things regarding taxation, customs and more.
China works with an import and export financing that uses manual and paper-based operations for processing the requests of large and complex industries and firms. This is very ineffective for the Chinese economy. With the new system, it will be possible to improve efficiency, reduce errors, operational risks, and financing costs. The report explains that the data will be available in a blockchain network at all times.
Firms will be able to enter data regarding financing, audits, loans, and repayments, among other things. This will allow them to be able to manage the entire process. At the moment, the agency will be piloting the platform in the provinces of Jiangsu, Zhejiang, and Fujian. Shanghai and Chongqing will also be using the service. If everything goes on as expected, the intention is to embrace this platform all over the country.
China is one of the countries with the largest number of blockchain patents released. The country hosts several firms working with distributed ledger technology (DLT) and the government supports its development.