A blockchain trade finance platform spearheaded by China’s central bank has entered the testing phase ahead of an official roll-out.
According to a report from 21st Century Business Herald on Tuesday, the first phase of the so-called Bay Area Trade Finance Blockchain Platform is already deployed across financial institutions in the southern city of Shenzhen and is currently undergoing final trials.
The Bay Area in Southern China is an economic development zone consisting of major cities along the Pearl River and the special administrative regions of Hong Kong and Macau.
The trade finance project was jointly pushed through and coordinated by the Digital Currency Research Lab of the People’s Bank of China and the central bank’s Shenzhen branch, the report indicates. Major commercial banks in the country, including the Bank of China, the Bank of Communications, China Merchants Bank, Ping’An Bank and Standard Chartered, also participated and assisted with development.
The platform is aimed to boost the efficiency of interbank transactions and to help small- and medium-sized businesses access a wider range of financing tools, such as asset-backed securities, as data can be easily shared across participants via a distributed network
Further, greater levels of transparency of transactions and information shared on the blockchain is expected to give local regulators more granular oversight for improved risk control and fraud prevention, the report added.
The trade finance effort comes as Hong Kong’s de facto central bank is also deploying a blockchain-based trade finance platform, with participation from a group of financial institutions in the Chinese special administrative region.
As CoinDesk has previously reported, the Hong Kong Monetary Authority was set to roll out the project by September – one technologically developed Ping’An Insurance, the entity that owns Ping’An Bank.
Shenzhen skyscrapers image via Shutterstock