New Blockchain Platform Due to Launch by China Banking Association (CBA) for Trade Finance
In China, the entity in charge of the regulations for crypto in the local economy is the China Banking Association (CBA). In order to make some progress in their sector, the CBA has announced their intent to launch a platform for trade finance, centered around the use of blockchain technology. The annoucement occurred last week, though the organization is in the process of preparing it for public use.
So far, the platform already has the cooperation of 10 major banks in this area, which includes HSBC (China), Bank of China, China Merchants Bank, Ping An Bank, and China Postal Savings Bank. The project altogether is being called the “China Trade Finance Inter-Bank Trading Blockchain Platform,” and it will help with multiple financial services, like trade finance and transactions.
The vice president of HSBC China, Fang Xiao spoke with China News about this association, saying,
“The establishment of this inter-bank platform can be described as extraordinary, opening up barriers between different banks and realizing the interflow of information… The use of blockchain technology to promote trade finance reform has become a global trend. The HSBC Group's overseas blockchain trade pilots show that the blockchain is used to improve the efficiency, safety and scale of trade.”
As far as tech support, Peer Safe and other fintech firms are supporting the CBA during this time. They have already finished two pilots that allow them to issue letters of credit (LoCs), along with securities that are already backed by assets. These pilots were completed with the support of the Industrial and Commercial Bank of China and China Merchants Bank.
Now, CBA wants to start bringing in smaller banks, along with taxation and customs agencies. The addition of blockchain technology helps with the overall operations of all of these entities. In fact, the central bank of China already deployed a project called the Bay Area Trade Finance Blockchain Platform, which impacted financial institutions in the area. As recently as November, a new blockchain trade finance platform was launched by the Hong Kong Monetary Authorities.
In a statement from the CBA, it looks like the official launch should happen this year, and the expansion of the platform would not happen until they have a smoothly running product.