China’s State Administration of Foreign Exchange (SAFE) has recently taken a move to help leverage blockchain technology so that better cross-border financial services are offered, reports local news outlet Global Times.
To be more specific, their cross-border financing blockchain platform pilot now covers up to 19 provinces and cities, which has increased from their original decision to cover nine. According to the news outlet, SAFE’s endeavor is deemed the most scalable in the country, as it has the ability to provide accounts receivable financing services from exports, and ensures that companies taking part in cross-border related businesses have been verified.
As of the end of October, the introduced system has supposedly completed 6,370 transactions as well as giving out $6.8 billion in loans. Thus far, they’ve been able to secure 1,262 companies as clients, most of which consists of small and medium-sized businesses.
Having spoken to Global Times Analyst, Cao Yin shared that this is definitely a milestone for them, especially considering the gap in traditional financial processes and that of the blockchain system.
More specifically, he shared:
“The traditional financial processes […] leave a lot of room for financial fraud. But as the blockchain system promises a decentralized and encrypted track of each capital flow, it leaves potentially little to no space for human mediation.”
In addition to allowing users to retort to a financial service that isn’t with a traditional financial institution, SAFE’s system is deemed crucial for Chinese exporters because it promotes real-time supervision and is time-efficient (i.e. processing time from one to two days to simply 15 minutes) among other improvements.