The People’s Bank of China (PBoC) has managed to secure a funding of $4.7 million from the Central government of China for its blockchain trading platform. The funding is specifically for research and development and will be channeled in 3 years. The platform is also known as the Bay Area Trade Finance Blockchain is run by several bodies who entail: PBOC’s digital currency research lab, Chinese academy of sciences, major local banks and leading Chinese universities.
The blockchain platform was made public in September 2018 in Shenzhen. It is meant to ensure efficient transfers and a secure ledger so that businesses and government departments can be able to share information confidently. In addition to that, the platform also supports supply chain financing, international trade supply, tax filing.
So far, the blockchain platform has increased efficiency to the firms that have signed up on it. By mid-January, there are up to $12.4 billion worth of transactions that were processed for the users of the platform which includes 38 banks and more than 1900 firms.
The platform has reduced the time it takes to process trade financing from 10 days to only 20 minutes. The transaction costs have also tremendously reduced by up to 6%.
The rise of blockchain in China
There has been a tremendous increase in blockchain adoption in China. So far, China is leasing the world in Blockchain adoptions and that is evident from the blockchain patent applications.
Despite the current coronavirus situation in China, there is a blockchain-based electronic invoicing system that was launched in Beijing at the beginning of March. Blockchain invoicing is safe for the environment as it is paperless.
Since the outbreak of Coronavirus, there are more than 20 blockchain applications that were launched to help manage the disease. Blockchain was used as it can help in the supply chain of both medical supplies and masks, maintaining health records, and dealing with relief efforts.
The efforts by PBOC dates back in 2014 when it was keen on studying the blockchain and its applications in trade and finance. That made its patents to be the top among all the other central banks in the world.
China acknowledged blockchain as a strategic frontier technology in its national plan in 2016. There was then an action plan that was released to promote the adoption in 2018. That explains why China is ahead in blockchain adoption.
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