China continues its blockchain journey by creating a new finance and trading platform with the assistance of its central bank. The country may have been cracking down on activities using virtual currencies, but when it comes to the underlying technology China is not holding back. China is constantly signing various blockchain-related patents with the goal to be in the lead when it comes to the support of this new technology.
That China is not a fan of cryptocurrencies has been made very clear over the past years. Recently, China took another step to block cryptocurrency related activities. The country shut down numerous blockchain-related news accounts on the WeChat social app and banned hotels in downtown Beijing from hosting events promoting cryptocurrencies, in a renewed crackdown on activities related to the digital money.
That said, while China has been giving cryptocurrencies the cold shoulder, the same cannot be said for blockchain technology. The country is leading the way when it comes to filing blockchain patents, even ahead of the US. Last week, China legalized the use of blockchain-verified information in Internet-related court cases.
Today the news came out that China is supporting the development of a new blockchain-based trading platform. The new platform is backed by People’s Bank of China and is named the “Guangdong-Hong Kong-Macao Great Bay Area Trade Finance Blockchain Platform”. The goal of the platform is to end the various financial and transaction-related issues that micro to medium firms currently have to deal with.
According to Li Chao, an analyst at Beijing-based consultancy iResearch:
“China has been cracking down on activities using virtual currencies, but blockchain is a quite advanced technology which has been adopted by many countries. So China will definitely not lag behind. Blockchain technology could also ensure a more efficient and safe information-sharing system, and it is expected to reduce the financing costs for micro- to medium-sized enterprises.”
With the new blockchain-based trading platform, China takes another big step towards the applicability of the blockchain technology, despite its stance it adopted against cryptos, in general. At the moment, it standards takes up-to two weeks to clear one round of trade financing, however using the revolutionary blockchain technology it could be done in approximately 20 minutes. At the same time costs would lower dramatically as described as noted out by the Vice President of the Transacting Division of Ping a Bank:
“Previously, trade financing costs for micro- to medium-sized enterprises were about 7% to 8%, but the blockchain system could cut the cost to less than 6%.”
China has always been keen to adopt and develop new technologies, and the blockchain technology has been officially acknowledged as legal. What do you think of China’s latest blockchain-based initiative? Let us know in the comments below!