The Middle Kingdom financial institutions are checking their cross-border trade financing tactic. This time, with a series of new blockchain-powered modifications that could attempt to reduce the country’s dollar dependency.
As claimed by Sina, China CITIC Bank based in Beijing, the nation’s seventh-biggest moneylender, has grown to be the primary domestic bank in China to utilize a blockchain-powered cross-border letter of credit in Renminbi for a domestic organization.
The financial institution utilized the Contour blockchain-based trade finance drive platform to manage the transaction.
The ambition is an international effort that also comprises BNP Paribas, Bangkok Bank, CTBC, HSBC, ING, Standard Chartered, SEB, and Citi, considering its platform went live earlier this year after several months of beta testing.
In the banking industry, letters of credit are typically issued in paper form as part of a process that can take several days. The media outlet reported that port operators have warned supply chains are being disrupted by the coronavirus pandemic, with a pressing need to use faster, contact-free trade financing solutions to plug the gaps.
China CITIC Bank’s debut involved the firm issuing an RMB import letter of credit for an importing company located in the Guangxi autonomous region in southern China for a total of USD 18m.
Meanwhile, the country’s biggest bank, the state-run Industrial and Commercial Bank of China (ICBC) has joined the foreign exchange market regulatory State Administration of Foreign Exchange’s cross-border financial blockchain service platform, per a report from China Email – although its first transaction on the platform made use of the American greenback.
The media outlet reported that on the same day that the system was connected, ICBC provided a customs declaration verification on a USD 20m export invoice financing deal for a manufacturing company based in Guangdong, which improved the efficiency of financial services for foreign trade companies.
And in other banking-related news, tech and entertainment industry giant Tencent’s WeBank has struck what it terms a “blockchain + Big Data” deal with the University of Electronic Science and Technology of China as well as the Big Data unit of China Unicom, the state-owned telecommunications operator, as claimed by ABI.
The university, based in Chengdu, is one of China’s top tech colleges and three parties said they would conduct “in-depth research on blockchain technology” and develop a range of open-source blockchain resources.