China Construction Bank, one of the largest Chinese commercial banks, has expanded its trade finance blockchain platform with new abilities, including cross-chain and inter-bank transactions, as trading volume surpasses $53 billion.
According to a Chinese media report, Ji Zhihong, the Vice President of CCB, speaking in Beijing at the official launch of the upgraded platform BCTrade2.0, said that the new platform will leverage blockchain technology to provide better financial services for Chinese exporters.
Launched in April 2018, he said that the platform has to-date processed over $53.5 billion transactions between exporters, banks and non-bank financial institutions.
The platform offers to factor and forfeiting services that enable exporters to get immediate cash by selling their medium and long-term receivables at a discount price.
Likewise, the new feature’s cross-chain function is going to allow the bank’s 54 domestic and international branches to process transactions with each other, as well as another 40 banking institutions, including both state-owned and foreign banks, commercial banks and non-bank platforms.
According to the State Administration for Industry and Commerce, the bank has appointed its subsidiary Jianxin Financial Services, capitalized with $230 million, to operate and maintain the new platform. The Shanghai-based fintech firm was founded last April by the bank’s affiliates.
However, the launch is the bank’s latest effort to increase the efficiency of its banking system for export trade financing with blockchain technology. It completed the debut blockchain-based trading through a factoring transaction in January 2018, according to a statement from the company.
The bank said in the statement:
“The move is in line with China’s economic plan to promote trade amid the One Belt One Road Initiative and help grow the real economy in the country.”
So, all four major state-owned commercial banks in China – CCB, Industrial and Commercial Bank of China, Bank of China, and Agricultural Bank of China, have launched blockchain-based financial services initiatives in the past two years.
However, ICBC, the largest bank in the world by assets, has used its online blockchain financing platform to help small and medium companies with factoring transactions. The bank gathered 1,300 users with $6.4 billion transactions in the first nine months since its launch last February, according to a statement from the bank.
Bank of China processed its first international money transfer to South Korea in dollars through its patented blockchain payment system last August, while the Agricultural Bank of China helped farmers with online trading by using its e-commerce blockchain financing system in August 2017.
Thus, China’s central bank started to run the Bay Area Trade Finance Blockchain Platform last September to help small and medium companies to finance in the areas between Hong Kong, Macau and Guangdong province in southern China.