As reported by local financial news source CNStock, the State Administration of Foreign Exchange (SAFE) worked with the Hangzhou Blockchain Technology Research Institute to build the open blockchain platform, which uses multi-signature technology to keep transaction content private, revealing details only to the companies involved and regulators such as those relating to customs, taxation, industry and commerce.
Traditionally, China’s import and export financing uses a manual, paper-based operation for processing a hugely complex industry and that brings low efficiency, commonplace errors, high operational risk and, thus, elevated cost of financing.
The forex watchdog’s blockchain platform takes a focus on export receivables – the funds owed to a company by a foreign buyer after delivery – allowing companies to enter data on financing, audits, loans repayments and so on, and manages the entire process. It further automatically verifies customs documents and calculates a final balance for the customs declaration, a factor that prevents double or excessive financing.
With initial development now complete, SAFE will now pilot the blockchain platform in three major trading provinces – Jiangsu, Zhejiang and Fujian – and two cities, Shanghai and Chongqing, CNStock indicates. The pilot will run for six months and is expected to be taken nationwide going forward, with many banks said to be involved in the scheme.
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