The Chinese central bank’s blockchain-driven trade finance platform is set to receive over 32 million yuan (approx. USD$4.6 million) in funding over the next several years.
The People’s Bank of China’s (PBOC) “Trade Finance Development Platform Key Technology Research and Development and Application Demonstration Project” (贸易金融开发平台关键技术研发与应用示范项目) will receive 32.35 million yuan in funding over the next three years following approval from the central government.
Domestic observers expect the project to serve as an accelerator for PBOC’s Central Bank Trade Finance Blockchain Platform (央行贸易金融区块链平台), which first commenced trial operation in Shenzhen in September 2018.
As of mid-January 2020 the Central Bank Trade Finance Blockchain Platform had hosted over 8000 operations for 1898 enterprises, with a total operations value of over 90 billion yuan, according to data from the People’s Bank of China (PBOC). 44 Chinese banks and 485 of their outlets are participants in the platform.
PBOC said that in future the Platform will connect to similar platforms in a greater number of countries and international organisations, with the goal of creating a “global trade finance highway.”
“Trade finance requires the sharing of information between multiple parties to transactions, and transaction frequencies aren’t high,” said Di Gang, vice-head of PBOC’s Digital Currency Research Institute. “This is a natural fit for blockchain technology.”