China is testing a blockchain-based financial service platform for companies. The aim is to speed up the processing of cross-border trade financing. According to the city administration of Qingdao, a harbor metropolis, which is implementing the project, processes that are usually associated with a lot of documentation and a lot of time can be considerably simplified using blockchain technology.
As the Chinese news portal sina.com reported on the 22nd of April, the „Qingdao Blockchain“ is intended to speed up cross-border financial services. 37 companies and 30 banks are currently participating in the pilot project of the megacity in the east of the china.
According to Sina, processes that normally take hours or days have been reduced to a few minutes. Furthermore, the companies could avoid personal visits such as to customs authorities. Concrete business scenarios of the Blockchain project are financing audits, registration of customs documents, financing loans for export transactions and electronic transmission of tax documents.
Trade financing via Blockchain: fast solutions for companies
Efficient financing and lending is a great help for companies, according to recent reports. The feedback from the companies involved is therefore very positive, one example is Borec Brake System, a manufacturer of vehicle brakes based in Qingdao:
„We really didn’t expect that lending for trade finance would be so fast and the process to be so convenient. Thanks to the cross-border platform for financial blockchain services, the urgent needs of our company have been solved!
Due to the corona pandemic, the company’s raw material costs had risen and the order volume has decreased. As a result, a local office of the Foreign Exchange Department in Qingdao immediately contacted the local Bank of China office to get in touch with the company. The parties clarified the financing plan and operation details and the company submitted the export declaration and other commercial documents. Finally, the entire process from acceptance of the financing to verification of the authenticity of customs declarations and the granting of the loan on the cross-border financial blockchain platform took only 10 minutes.
According to Sina, representatives of the Qingdao City Government stated that they would like to further develop the Blockchain project. Among other things, even more financial institutions are to join the network. Furthermore, the city is concentrating on offering further applications on the platform.
China as pioneer in blockchain technology
China has been successfully testing the use of block-chain-based databases for lending in Guangdong since January. The province in South China offers small and medium-sized enterprises fast and unbureaucratic financing via block chain.
Recently, China also generated attention with the Blockchain Service Network (BSN). The network, was launched on April 15 after a six-month beta phase. It should facilitate the development of blockchain based applications, allow the setup of nodes and provide an infrastructure for various payment options.