The People’s Bank of China (PBoC) has reportedly acquired 32.35 million RMB (appr. $4.7 million) in special funding in order to finance the ongoing development of its blockchain or distributed ledger technology (DLT)-enabled trade finance platform.
The funding, which will be gradually injected during a three-year period, should help make enhancements to the DLT-based platform, which has been developed for small and medium-sized enterprises (SMEs).
The platform allows Chinese SMEs to gain access to a wide range of financial software packages.
More than 35 Chinese banks are now part of the blockchain-enabled trade finance platform, according to a report from the Global Times (which cited the local Xinhua News Agency).
The platform has facilitated transactions worth an estimated 87 billion Chinese yuan (appr. $12.4 billion) as of December of last year.
The DLT-powered trade finance platform has significantly enhanced the overall efficiency of the loan approval process for SMEs. The amount of time it takes to carry out trade financing by local banks has been reduced from more than ten days to only 20 minutes. Meanwhile, corporate financing charges have reportedly dropped to less than 6%.
Established in September 2018, the blockchain-powered platform is managed by the PBoC’s Digital Currency Research Lab, the Chinese Academy of Sciences, several prominent Chinese universities (including the prestigious Tsinghua University) and local banking institutions.
The Hong Kong Monetary Authority also committed to a deal, in November 2019, with China’s reserve bank to integrate eTradeConnect, its blockchain-enabled trade finance platform, with the bank’s network, in order to further expand its trade finance activities.