The People’s Bank of China (PBoC0 has proposed the development of a trade finance platform powered by blockchain for the Guangdong-Hong Kong-Macao Greater Bay Area, in a move designed to improve financial technology in the region.
The central bank announced the proposals in response to a consultation process drawing on expertise from a number of agencies including the China Banking Regulatory Commission, the Foreign Exchange Bureau and the China Securities Regulatory Commission.
The document sets out plans for the platform which would be delivered “under the premise of legal compliance and commercial voluntariness.”
Participating banks would be able to share information securely on the blockchain, without the need for third party verification or intervention. According to the central bank, this allows for greater automation through smart contracts and AI, as well as providing better tools for risk management and financial supervision.
The proposals would see the bank work with other stakeholders to develop the trade finance platform. In common with other trade finance blockchain solutions, the technology would allow parties across supply chains to secure essential finance, while improving efficiency and reducing risk for creditors.
The document setting out the model is only the latest in a series of projects backed by the People’s Bank of China. Notoriously restrictive on digital currency and the use of digital assets by private citizens, the Chinese government has been amongst the most proactive in the world in developing technologies powered by blockchain.
The central bank is also known to be at an advanced stage of developing a central bank digital currency (CBDC), or digital yuan. Some reports suggest the bank is preparing to imminently roll-out its digital currency to consumers and businesses, with late stage pilots already underway in several parts of the country.
New to blockchain? Check out CoinGeek’s Blockchain for Beginners section, the ultimate resource guide to learn more about blockchain technology.