People walk by a sign of Blockchain Summit during the Mobile World Congress Shanghai 2019 in June. Photo: IC

The State Administration of Foreign Exchange (SAFE) will accelerate the construction of a cross-border platform to offer blockchain services in finance this year. It will also strengthen protection against state financial risks, according to a SAFE meeting on planning work for 2020. 

The meeting also noted the importance of protecting the financial system from external risks, especially those involving cross-border transactions. The SAFE aims to stabilize the security of China's foreign exchange reserves, deepen reforms to delegate power, streamline administration and optimize government services. 

The cross-border blockchain platform for financial services was launched by the SAFE in March 2019, and it has undergone trials in 17 provinces and municipalities. 

It is expected to lower financing barriers for small and medium-sized enterprises (SMEs), and it can provide financing services with higher transaction security and efficiency, Cao Yin, an analyst in the blockchain sector, told the Global Times Sunday. 

"The difficulties for SMEs to obtain finance, especially when it involves cross-border trading, mainly lie in the verification of the companies' creditworthiness," Cao noted. "This forces the companies to provide documents for human verification, which is costly and time-consuming compared with the blockchain platform."

The blockchain platform, by contrast, provides a decentralized system that can track the companies' trading history including past capital flows. It can also give fast and objective assessment of the companies and provide easy financing services accordingly, according to Cao.

"It is foreseeable that the cross-border blockchain system will be a milestone in providing financing services in China," Cao said. 

As of November 20, the blockchain platform launched by the SAFE had served 1,590 companies. So far, it is the only state blockchain platform registered with the Cyber Administration of China, according to the Economic Information Daily.