China’s foreign exchange reserve regulator, the State Administration of Foreign Exchange (SAFE), is set to pilot a cross-border trade finance blockchain platform. The news was reported by local financial news agency CNStock on April 24.
Being largely based on manual, paper-based processing, China’s current traditional import and export trade financing system is reportedly beset by low operational efficiency and asymmetrical, incomplete data sharing.
To better tackle the complex logistics of trade financing transaction management, data can be recorded on a cryptographically secured distributed network that allows for real-time and transparent data sharing, the report notes.
The platform reportedly has the capacity to manage the entire trade financing process — which includes automatically verifying the authenticity of customs documents and corresponding financing balances, thus preventing double or excessive financing, according to the report.
Now that development of the platform has been completed, SAFE reportedly intends to pilot the project for six months in three major trading provinces – Jiangsu, Zhejiang and Fujian – and two cities, Shanghai and Chongqing. It will reportedly add support for further business scenarios as well as draw participation from numerous major banks, including the Bank of China, the report states.
As previously reported, a trade finance blockchain platform for cross-border trading across Guangdong, Hong Kong and the Macau Bay Area — backed by the PBoC — was piloted in September 2018.