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Amid the coronavirus outbreak, China seems to be going forward to achieve its blockchain ambitions.
Xuan Changneng, vice director of the State Administration of Foreign Exchange, recently revealed that 87 businesses have received over $200 million in loans through a blockchain-based cross-border payments pilot platform since the Lunar New Year holiday, CNBC reported.
The forex regulator launched the blockchain-based cross-border financing pilot program last March. The platform is targeted at companies engaged in cross-border business and provides them with accounts receivable financing services for exports and information verification services.
From the initial 9 provinces and cities where the pilot was launched, it has now expanded to cover 22 provinces, autonomous regions and municipalities. The platform has processed $15.9 billion in loans to nearly 2,500 businesses as of Feb 03. Changneng said that more than 170 corporate banks have joined the initiative.
The virus epidemic, which has reportedly claimed more than 1,500 lives, is expected to be a major blow to the Chinese economy with many parts of the country coming almost to a standstill. The blockchain-based platform can help small and medium-sized enterprises (SMEs) to secure finances in such difficult circumstances.
While traditional loan applications usually take days or even weeks, the platform reportedly accelerates the process, allowing applying for and receiving a loan on it in just a day.
″(Due to the impact of the virus), the negative effects of previous pain points such as lack of trust in business, verification inefficiency, lack of information sharing and difficulty of timely supervision have been further amplified,” Henry Ma, chief information officer at WeBank, said.
“The cross-border, financial blockchain services platform can play a bigger role, and help medium and small-sized enterprises improve the efficiency and convenience of getting export trade financing and other financial credit support.”
Changneng said that the platform is already handling foreign currencies. The Hubei province joined the platform last month, allowing foreign businesses in the region to benefit from improved efficiency in areas such as export trade financing.
Alex Yang, CEO of blockchain development firm V.Systems, said that the platform is based on a “closed” blockchain system in which network participants retain control. This, he explained, eliminates some of the technical hurdles associated with open source “public” and “decentralized” financial blockchain systems.
“If there are more and more applications, and more financial institutions pay attention, then it will be good for the development of blockchain,” he added.
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