The China Banking Association (CBA) is hoping to target smaller banks to expand its blockchain platform developed for the nation's banking sector, reports in BlockTribune said Monday (Jan. 7).
The China Trade Finance Inter-Bank Trading Blockchain Platform is a system designed by the banking group to manage data storage, movement and security for financial institutions (FIs) using distributed ledger technology (DLT). When the system was launched just before the new year, the CBA said 10 banks had signed on to use it, including the Industrial and Commercial Bank of China (ICBC), China Merchants Bank and HSBC Bank (China).
At the center of the system is an effort to reduce friction of moving information between banks, and to use those efficiencies in data management to enhance trade finance operations, reports said.
"The establishment of this inter-bank platform can be described as extraordinary, opening up barriers between different banks and realizing the interflow of information," said HSBC China Vice President and Head of Industrial and Commercial Finance Fang Xiao in a statement. "The use of blockchain technology to promote trade finance reform has become a global trend. The HSBC Group's overseas blockchain trade pilots show that the blockchain is used to improve the efficiency, safety and scale of trade."
Last year, HSBC launched its blockchain trade finance solution in pilot phase, announcing at the time that it would continue to focus on further developing the platform for trade finance in 2019. The bank has also collaborated with IBM and former Ripple CEO Chris Larsen to explore the use of blockchain for trade finance.
Its work in China also signals the national banking industry's own efforts to continue developing blockchain solutions in banking and trade finance. According to the reports, the CBA plans to target smaller banks to join its blockchain system.
"The China Banking Association plans to further expand the platform coverage, absorb the majority of small and medium-sized banks to join the platform, expand the platform business type and actively cooperate with relevant agencies, such as taxation and customs, to give full play to the platform of industry organizations," the CBA said in its announcement.