JD Finance Launch Plans For Asset-Backed Securities On The Blockchain

One of the main branches of JD.com will issue asset-backed securities in blockchain. JD Finance, the financial brand of China-based JD e-commerce conglomerate, announced Wednesday that it is planning to issue asset-backed securities (ABS) on the blockchain.

According to the Securities Times, JD Finance, in partnership with Huatai Securities, a brokerage firm that will underwrite future issues, and Xingye Bank, which will act as trustee, established the test from a point of sale of the China Securities Regulatory Commission (CSRC).

The financial firm is planning to issue the securities using a consortium blockchain that will see each of the parties act as nodes of the system, thus recording each of the transactions in a transparent manner.

Blockchain Financial Experiment

One of the purposes of the project is to determine whether the blockchain technology implemented can meet the demands of the various parties involved in the asset securitization process, such as issuers, underwriters and buyers.

The company first launched its traditional ABS product without a blockchain platform in 2015, as well as an online service that helps other companies raise capital through their emissions. This way of working translates into something like a portfolio of loans or credit card debt that can be traded on a secondary market.

The firm issued a cars loan in August 2017 using a blockchain platform, establishing the firm's initial evidence in incorporating distributed general ledger technology into its financial services, according to regional news portals.

JD.com also announced early in the second quarter that it will launch a proprietary blockchain-as-a-service platform this year, in line with other technology giants such as Huawei, Oracle, IBM and Microsoft. The date of the launch is not yet known.

The company has also been working with distributed ledger technology with the purpose of tracking meet shipments entering to the Chinese market. With this development, the company had the possibility to increase consumers’ trust and provide better products to its clients.

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