The People’s Bank of China (PBoC) has started to test a blockchain-based trade finance and account receivables platform earlier than scheduled.
The Shenzhen Central Sub-branch of the PBoC is in charge of the trial phase of the new Bay Area Trade Finance Blockchain Platform. This provides a regulatory system for trade finance, enabling the monitoring of several financial operations in real–time.
Open financial and trade ecosystem
The bank also plans to create an “open financial and trade ecosystem based on the Guangdong, Hong Kong, and Macau Bay Area”.
The PBoC has partnered with the Bank of China, China Construction Bank, China Merchants Bank, Ping An Bank, Standard Chartered Bank and BYD Co. to launch the platform.
A local report explains that the new system is aimed at helping “banks to conduct business authenticity audits, reduce business costs, improve business efficiency, prevent and control business risks, assist regulators and strengthen information sharing between departments”.
Access to financing tools
Small and medium businesses can access a wide range of financing tools, including asset-backed securities, through the Bay Area platform.Regulators will benefit from the platform because it provides greater transparency of all transactions and data, allowing for better supervision, risk control and fraud prevention.
Local banks in Shenzhen, China have already implemented the first phase of the platform, according to domestic media reports.
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