Although many countries around the world are struggling to impose more crypto regulations to limit cryptocurrency exchanges operations, the Central Bank of China is now supporting the development of a new blockchain-based trading platform.
The new platform is backed by People’s Bank of China and is named the “Guangdong-Hong Kong-Macao Great Bay Area Trade Finance Blockchain Platform.”
“China has been cracking down on activities using virtual currencies, but blockchain is a quite advanced technology which has been adopted by many countries. So China will definitely not lag behind. Blockchain technology could also ensure a more efficient and safe information-sharing system, and it is expected to reduce the financing costs for micro- to medium-sized enterprises,” stated Li Chao, an analyst at Beijing-based consultancy iResearch.
With the new blockchain-based trading platform, China takes another big step towards the applicability of the blockchain technology, despite its stance it adopted against cryptos, in general.
Central Bank of China is supporting the development of a new blockchain-based trading platform
As the report on this achievement stated, it takes up to two weeks to clear one round of trade financing on a standard system, while on the blockchain-based trading platform it would only take 20 minutes.
Also, the costs would lower considerably as highlighted by the Vice President of the Transacting Division of Ping an Bank.
“Previously, trade financing costs for micro- to medium-sized enterprises were about 7% to 8%, but the blockchain system could cut the cost to less than 6%,” the VP stated.
However, changing the all financial system is costly and challenging so that, for the time being, the Central Bank of China will test the new blockchain-based trading platform in the area of Greater Bay.
China has always been keen to adopt and develop new technologies, and the blockchain technology has been officially acknowledged as legal. The same is not applicable for cryptocurrencies which are still considered a threat to the fiat currency systems in China.