Three Chinese banks have jointly launched a forfaiting trading platform based on a consortium blockchain, with transaction volume reaching 30 million yuan (US$4.3 million) on the first day it went online.
Bank of China teamed up with China CITIC Bank and China Minsheng Bank in developing the forfaiting trade finance platform, according to a local media report. The platform ensures that all business is processed on the blockchain and fully automates connections based on its distributed framework.
Forfaiting enables credits and deferred payment operations, in the medium and long term, to be made effective immediately.
It is another innovative project in the country’s banking industry to expand blockchain application after the first inter-bank blockchain-based letter of credit system launched in June 2017.
It is reported that the platform makes use of technology of blockchain and big data to effectively resolve several key problems in traditional interbank asset transactions. These include problems with the accuracy of information transmitted via conventional channels such as telephone or mail; problems with complex workloads and information security; the diffuse nature of pricing information as well as lack of standardization between the parties to transactions.
The platform adopts a form of consortium blockchain with infrastructure built by Hangzhou-based Yunphant Blockchain, according to local finance news outlet Yicai.
Industry insiders said that the successful launch of blockchain forfaiting trading platform is an effective combination of fintech productivity and banking system’s real business needs. It will reshape the transaction process of inter-bank assets, greatly improve the efficiency and security of transactions, finally optimize customer experience and better support the development of substantial economy.
A plurality of Chinese banks has disclosed their blockchain applications in various use cases in these years. For example, Bank of China rolled out a blockchain-based e-wallet named BOCwallet in Jan last year; the Agriculture Bank of China developed a decentralized network to offer unsecured loans for agricultural e-commerce merchants; China Construction Bank also launched a blockchain-based platform that provides cross-bank and cross-border loan issuance for small businesses.
*Edited based on an article from 8btc.