China has debuted the use of blockchain technology to facilitate purchase-order financing in the Xiong’an New Area of Hebei province, by leveraging the region’s vast data system for construction projects.
Xiong’an New District Area the launch of China’s first blockchain-based purchase order financing initiative in November, based upon the Xiong’an New District Construction Fund Management Blockchain Information System (雄安新区建设资金管理区块链信息系统) that was developed earlier in 2021.
The system has already seen over 100 government investment projects placed on chain, and processed over 10,000 payments, as Xiong’an undergoes a vast construction spree that will see total investment of more than 600 billion yuan in 2021 alone.
Wang Jun (王军), chair of Xiong’an Kejian Supply Chain Finance Management Services Co., (河北雄安科建供应链管理服务有限公司) highlighted the problems that building companies in the region have faced when seeking financing.
“Because we do not have fixed assets for collateral, and cannot find guarantee enterprises, the only thing we have to prove that we are participating in the development of Xiong’an is enterprise purchase orders,” said Wang to Sina.
Wang’s company was able to obtain 4 million yuan in financing from banks solely by using purchase orders placed on chain.
“With blockchain purchase order financing, the blockchain mainly plays the role of ensuring the reliability of data and permitting 3D interactions,” said Meng Hongwei (孟宏伟), deputy-chair of the Xiong’an New District Smart City Joint Innovation Blockchain Laboratory (雄安新区智能城市创新联合会区块链实验室).
“Our vast construction funds data system is unique in China, and we are always thinking of ways in which we can use this data,” said Zhang Zhaorui (张钊睿), head of the Xiong’an New Area’s reform and development department finance bureau.
“The establishment of a blockchain-based credit system can better manage and assess each of the enterprises participating in construction, and create an excellent operating environment for the development of Xiong’an New Area in future.”
“At the beginning we used blockchain technology to issue relocation funds to the public, and subsequently used it to issue salaries to rural workers,” said Meng.
“In future we will use blockchain technology to provide services to high-end tech enterprises that are developing in Xiong’an.”