The People’s Bank of China (PBoC) to receive $4.7 million in additional funding from the government for its blockchain-based trade finance platform, local media reported on 9 March.
According to the report, the “special funding” from the government will be administered over a period of three-years, and will be aimed primarily at research and development projects. Known as the Bay Area Trade Finance Blockchain Platform, the PBoC platform was introduced for the first time in Shenzhen in September 2018, with the aim of providing banks and businesses with transaction efficiencies.
The platform, which allegedly also provides regulators with greater oversight, is estimated to have processed around $12.4 billion worth of transactions by mid-January. Reportedly the platform has been used by a network of 1,900 companies and 38 banks, including major commercial banks such as Bank of China, Ping An and Standard Chartered.
According to the Monday report, the PBoC platform has significantly improved the efficiency of small and medium size loan approvals. Allegedly the time required to process trade financing has dropped from over ten days, to just around 20 minutes. The platform has also helped in reducing the costs incurred through corporate financing, which have dropped below 6 percent.
Last year, the PBoC signed a Memorandum of Understanding with the Hong Kong Monetary Authority to mutually collaborate on the development of a trade finance platform proof-of-concept. The new platform will aim to connect the Bank of China’s Trade Finance Platform and Hong Kong’s eTradeConnect.