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Chinese Bank Trials Blockchain Loan System

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A report from a Chinese news site states that one of China’s “big four” banks has trialled a loan issuing system using blockchain. ABC – The Agricultural Bank of China – issued a $300,000 loan using agricultural land as collateral, using high-profile nodes hosted by the Land and Resources Bureau of the region and the People’s Bank of China. The issuance took place in a local branch in the Guizhou province, which is located in southwestern China.

The bank are aiming to use the new blockchain system to ensure that loans are issued more quickly, but also to guard against dual applications and potential fraud. This is particularly pertinent in Guizhou, which is one of the poorest provinces in the country, but rich in natural resources and farmland.

Should the trial prove successful, it is thought that ABC will expand the system to other sectors, including real estate. For the moment however, its main focus is to get the system set up for agricultural-backed loans.

The news comes as the Chinese Ministry of Finance has announced a new fund to the tune of around $10 billion, which is aimed at supporting credit for small businesses and agricultural firms and projects. The Industrial and Commercial Bank of China, the Agricultural Bank of China and the Bank of China, as well as Huaxia Bank and Shanghai Pudong Development Bank on the joint-stock side, have all invested in the fund out of their own pockets. The aim is to support 150,000 new businesses.

Image Credit: Deposit Photos

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