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JD Finance Will Issue Blockchain-Based Asset-Backed Securities

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JD.com’s financial subsidiary, JD Finance (Jingdong Finance), has announced that it will issue asset-backed securities (ABS) in partnership with Huatai Securities Asset Management – a brokerage company headquartered in China. This will be an upgrade to the existing ABS products, which have been running since 2015. The new partnership will use a consortium blockchain to ensure maximum transparency.

A local report from a China Securities Regulatory Commission outlet reports [translated from Chinese]:

Huatai Securities Asset Management are putting more emphasis on the application of financial technology in the business field. The currently established asset securitization business management system is conducive to the prevention of risks of various ABS products and thus protects the interests of investors.

Back at the end of last year, JD announced that JD Financial was stepping up its cloud-based offerings, and management of big data. They have also been looking at AI usage and ways to reduce costs. It could be that a blockchain service for ABS fulfils at least some of these criteria for development. Back in December last year, Liu Qiangdong, JD.com’s CEO and founder, told the Chinese media:

We define JD Finance as a partner, but not a subverter, to the financial institutions. We help banks improve their efficiencies in credit authorization by more than 10 times and reduce the costs by 70 percent, and by virtue of our AI technologies, the ratio of bad loans and capital loss rate is about 50 percent lower than the industry average.

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