OneConnect Financial Technology, the Fintech division of Ping An Insurance, China’s largest insurance and logistics conglomerate, has partnered with the China Merchants Port Group (CMPort), in order to develop a blockchain or distributed ledger tech (DLT)-enabled logistics platform.
The DLT-based solution is being created for the Guangdong-Hong Kong-Macao Greater Bay Area. This, according to a recent report from the China News Service, a state-owned media outlet.
Xiaoying Chen, director of Shenzhen Customs, stated:
“Since the central government’s directive to develop blockchain technology from last year, Shenzhen customs, China Merchants Group and Ping An have started to work together to study blockchain applications in cross-border logistics.”
The platform will aim to provide timely information from local custom services, port operators and managers, logistics firms, financial institutions and various exporters and importers through a single platform.
The platform will obtain and manage data via shared blockchain-based databases.
The initiative aims to provide a more cost-effective and streamlined tracking system. The DLT-powered platform will also make financial services more accessible to trade firms
The system will be connected to five separate databases, which will be used to manage information about trading firms, goods and services, logistics, contracts, and various documents.
It may help Chinese government entities with improving their management of global trade while reducing processing time for banks and other financial service providers.
OneConnect is notably one of the four Fintech unicorns that has been supported by the Chinese government-backed Ping An insurance group.
The Fintech company aims to apply blockchain or DLT to legacy financial systems and services via its proprietary cloud technology.
In 2018, SoftBank led a Series A investment round in OneConnect with a valuation of over $7 billion. In November of last year, the company went public on the New York Stock Exchange (NYSE).
OneConnect’s initial public offering (IPO) secured $359 million in capital at a valuation of about $3.63 billion (as of its first trading day on December 13, 2019).
The China Construction Bank, a leading national commercial bank, has also made a strategic investment in a DLT-based trade finance platform.
The blockchain platform allows exporters and importers to connect with financial institutions and lending firms to acquire short-term loans. The bank confirmed in October 2019 that trading volume on the platform had surpassed $53 billion since its inception in 2018.