Over 70 Chinese financial services companies, including all state-managed banking institutions and the nation’s largest technology firms, are currently using some type of blockchain or distributed ledger technology (DLT)-enabled financial applications.
This, according to the Industrial and Commercial Bank of China (ICBC), a multinational Chinese banking company with over $4 trillion in assets.
As mentioned in a recently published whitepaper, the ICBC revealed that China’s banks are either planning or already using DLT-based platforms to manage trade financing, supply chains, digital invoices, and settlement processes.
The whitepaper points out that there are some specific blockchain use cases that have been given special consideration. For example, the ICBC has developed a DLT-powered international trade settlement platform for conducting trades between China and Europe. The platform also uses smart contracts to verify and sync shipping and supplier data that’s shared by firms, warehouses, customs departments, banking institutions, and government entities.
As noted in the whitepaper, Chinese banks and enterprises are using DLT platforms to manage money, monitor supply chain management systems, issue financial securities, and keep track of loyalty points.
There are about 420 blockchain-related firms in China, which includes around 17% that have been deployed to manage processes related to finance. About 120 DLT-powered financial services initiatives had registered with the country’s Cyberspace Administration by the end of last year, the ICBC confirmed.
The largest tech firms in China, which include Alibaba, Baidu, Tencent, and JD, are developing their own blockchain-enabled financial service solutions. Most of these DLT networks are private or permissioned platforms.
China is also developing its own central bank digital currency (CBDC). The nation’s virtual yuan has been tested in several major cities including Shenzhen, Suzhou, Xiongan new area, Chengdu, and the future location of the Winter Olympics.