The agency that regulates and manages China’s foreign exchange reserves has developed a blockchain system aimed at eliminating the ineffectiveness of cross-border trade finance.
The State Foreign Currency Agency (SAFE), in collaboration with the Hangzhou Block Chain Technology Research Institute, built a blockchain platform that uses multi-signature technology to ensure the confidentiality of transaction content, revealing details only to users.
Traditionally, Chinese import and export financing uses manual paper-based operations to process an extremely complex industry, which leads to low efficiency, common mistakes, high operational risk and, consequently, high financing costs. According to the report, the placement of financial data in a distributed network allows you to exchange information transparently and in real time.
The Forex Watchdog blockchain platform focuses on export receivables — funds owed to a company to a foreign buyer after delivery — allows firms to enter data on financing, audits, loan repayment, etc. And it controls the entire process. In addition, it automatically checks the customs documents and calculates the final balance for the customs declaration, which prevents double or excessive financing, according to the report.
Thecryptocurrencypost.net reports that after completion of the initial development, SAFE will now pilot the blockchain platform in three major trading provinces – Jiangsu, Zhejiang and Fujian – and in two cities, Shanghai and Chongqing.