A view of the PBC’s headquarters in Beijing Photo: cnsphoto

A blockchain trade finance platform spearheaded by the People's Bank of China (PBC), the country's central bank, has acquired special funding for key research and development projects, worth 32.35 million yuan ($4.7 million) over the next three years, media reported on Monday.

The PBC unveiled the blockchain trade finance platform in Shenzhen, South China's Guangdong Province, in September 2018. Information input in the platform by enterprises cannot be modified, and involved banks can share information with other departments.

The number of banks and companies involved in the platform has continued to increase following its launch. By mid January, the platform linked 44 banks and 1,898 companies, and processed more than 90 billion yuan in transactions, according to the Xinhua News Agency.

Industry insiders noted the funding would help drive the growth of the blockchain trade finance platform, which is the most supported and highest-level blockchain project at the national level.

The central bank is expected to make sharing information safe and secure and further facilitate small and medium-sized enterprises (SMEs) access a wider range of financing tools during the COVID-19 epidemic, they noted.

The trade finance project was jointly pushed through and coordinated by parties such as the Digital Currency Research Lab of the PBC, major commercial banks in the country, the Chinese Academy of Sciences and top domestic universities like Tsinghua University, according to media reports.

Every trade scenario can crack "isolated islands of information" by employing blockchain technology, but if a unified industrial standard and mature technology are lacking, information barriers will still emerge in businesses, Wu Hao, an independent analyst based in Shenzhen, told the Global Times on Monday.

Given such context, accelerating the advancement of the trade finance platform will play a vital role in boosting the efficiency of interbank transactions, as data can be shared across participants via a distributed network.

The platform has helped greatly improve the efficiency of SME loan approvals - the time required to process trade financing has been shortened from over 10 days to about 20 minutes, Xinhua said, citing an official with the PBC. Corporate financing costs have also dropped to less than 6 percent.

Global Times