Reflecting its love for blockchain, the Chinese tech sector has yet again exemplified how the technology can be used in different spheres of business. Although the nation’s government is quite hostile towards Bitcoin, Chinese enterprises have always had a clear consensus when it comes to harnessing blockchain technology.
Reportedly, one of the largest state-owned commercial banks in the country, Bank of China (BOC) has signed a strategic cooperation agreement with financial service provider China UnionPay, to fabricate a blockchain-backed payment system. Talking about the expanse of blockchain technology, payments is not the only zone seeing the probe of decentralized technology as, in other news, Zheshang Bank has issued blockchain-backed Account Receivable (AR) Securities worth $60 million.
The joint project by BOC and UnionPay is expected to mobilize payments among enterprises, and pave a way for cross-border payments. As per the official press release, BOC added that the innovative move would focus on possibilities in the field of payments, augmenting product optimization, marketing sub-sets of banking services like mobile banking, cloud flash payment APP, and joint exploration of the utility of blockchain and big data in financial systems.
The securities introduced by Zheshang Bank – one of the largest private banks in China – have been deployed on an indigenous blockchain-based platform. Technically, the platform would facilitate listing of assets for registered companies and enable them to reach out potential investors.
The securities issued by the bank are backed by account receivables portfolio, which is considered quite a high-liquidity asset. Account receivable invoices are generated during transactions between the company and clients that failed to pay for services they ordered. Precisely, such securities allow investors to buy account receivable invoices listed in a portfolio, on a discounted rate, only to profit by selling them at original prices.
The technology sector in China has been among the biggest adopters of blockchain technology, and is leveraging the ledger-based technology in not just digital applications, but also some of the core sectors, like power. Evidently, Fudan University in China announced last month, a blockchain-based solution to buy and sell unused power across the country, which effectively brings together renewable energy producers on a single platform.