According to reports from a Chinese finance news media outlet, the blockchain trade finance solution created by the country’s apex bank: People’s Bank of China, has processed more than 30 billion yen (equivalent to around 4.36 billion dollars) in foreign exchange transactions.
As the report elaborates, the 483 branches of the 28 banks present in Shenzhen currently support the said platform, and it is operating normally in all of these. Yet, apparently because of an apparently uneven adoption of fintech solutions, the extent of the business volume is still proportionately subpar.
The representatives from People’s Bank of China said that the use of blockchain technology usually helps in avoiding the slow and extremely time consuming paper trail that usually exists between the various departments in a traditional banking ecosystem. This is quite common in the trade finance sector and the use of blockchain technology really speeds things up.
On the 4th of July, the Shenzhen Municipal Central Bank Branch of the People’s Bank of China, and the Shenzhen Taxation Bureau of the State Administration of Taxation finalized a strategic agreement to cooperate. This agreement is essentially meant to ensure easy and automatic tax filing via the central bank’s blockchain platform for trade finance.
On July 4, the Shenzhen Municipal Central Bank Branch of the PBoC and the Shenzhen Taxation Bureau of the State Administration of Taxation signed a strategic cooperation agreement. The aim of the cooperation is to realize automatic tax filing in the central bank’s trade finance blockchain platform.
The People’s Bank of China had launched the test version of the blockchain platform in September of 2018. The platform is primarily meant to make trade and financing activities like accounts receivable and trade financing easier.
The central bank of a major country embracing blockchain is indeed a big move and could serve as an example for many emerging economies in the near future.