One of China’s largest financial institutions, China’s Construction Bank (CCB) launched its blockchain based re-factoring platform. The announcement, released on December 10th by local news outlet, Sina Finance App, further points out the bank aims to boost efficiency and reduce risks pinned to the factoring business.
China’s state Owned Bank Launches Blockchain-Based platform
Factoring is a popular channel that mid and small-sized businesses use to raise capital by selling their invoices at a discount to another firm. China’s state owned CCB, the world’s second largest bank in assets owned, launched the blockchain based refactoring platform on Dec. 10th opening capital gateways for small businesses across the country.
The platform is set to enable the bank to buy the factored short term notes, invoices, and receivables from factoring companies, who collect them from the small businesses, for a discount. Given the immutability and security of the platform combined with the peer to peer features allows data to be easily and permanently stored while increasing efficiency of the process.
Notwithstanding the platform will allow easy credit rating across the corporations and risk management of the factorials.
The CCB’s Blockchain Journey
This however does not count as the first time the bank has worked with decentralized ledger technologies as it launched its trade finance platform on a blockchain earlier in the year. In October, the bank officially released the second version of its blockchain platform for trade finance dubbed “BCTrade2.0 Blockchain Trade Finance Platform.”
The product reportedly reached $53 billion USD in cumulative transaction volume since April 2019, its highest volume yet. According to reports, it digitizes commodities financial and trade services between over 50 CCB branches and 40 external organizations.
Asian based banks have been on the eye for blockchain projects to improve the efficiency of banking processes and reduce risks. China’s Banking Association (CBA) including some of the largest banks, such as HSBC (China), Bank of China, China Merchants Bank, Ping An Bank, and China Postal Savings Banking, announced the launch of a trade finance platform on the blockchain to “improve the efficiency, safety and scale of trade.”
Source: bitcoinexchangeguide.com
