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Issuance of the $300,000 land-backed loan becomes the first experience of the Agricultural Bank of China in issuing loans using blockchain.
Agricultural Bank of China (ABC), the third largest bank in China in terms of total assets and one of the “Big Four” banks, has completed loan granting of $300,000 using a blockchain system. This is the first time the bank tested the technology, issuing a loan in China’s Guizhou province. A piece of agricultural land backed the loan as collateral.
Being one of the major integrated financial service providers in China, Agricultural Bank of China (ABC) is committed to building an international first-class commercial banking group with featured operations, efficient and convenient services, diversified functions, as well as demonstrated value-creation capability. ABC specializes in financing and providing services to agricultural, commercial, industrial, and transportation enterprises in rural areas. It also offers personal banking, credit card products, wealth management and foreign exchange services.
According to ABC, the blockchain system is deployed among different nodes to facilitate the loan issuance including other commercial banks, the provincial branch of the People’s Bank of China as well as the local government’s Land and Resources Bureau.
The bank also said that due to using a distributed ledger to keep parties updated with data on borrowers and their collateral, the tamper-proof blockchain can streamline the manual process of loan approval and eliminate the problem of double spending – borrowers using the same piece of land as collateral to apply for loans from different banks.
ABC is aimed at bringing wider access to loans for farmers and businesses that own agricultural land in rural China, and blockchain application is part of the bank’s effort to do it. As local sources report, the bank is planning to further expand the application to issuing loans backed by other types of assets in the future. Earlier this year, ABC developed a decentralized network for issuing unsecured loans in smaller amounts to agricultural e-commerce merchants through an automated process.
Not only ABC, but the whole China is adopting the blockchain technology rapidly, and the government keeps on standardizing the blockchain sector. By the end of 2018, the Chinese authorities are planning to form National Blockchain Standardization Committee which will be based on a counterpart blockchain commission under the International Organization for Standardization (ISO). The authorities are also planning to implement the requirements for safety, reliability and interoperability, putting the standard of information security above all others.
12 of the 26 publicly listed banks from China have already started working on blockchain technology. The country is going to make blockchain as a “core” technology for the new digital economy. As was reported by CoinSpeaker, blockchain received support from the deputy director of China’s Ministry of Industry and Information Technology, Xin Guobin.
Despite being one of the first countries to ban cryptocurrency trading and ICOs back in the summer of 2017, currently China is known for tolerance towards blockchain, as the government has softened its stance since the beginning of this year. More and more blockchain projects are receiving support. A prime example is the launch of a $1.5 billion blockchain investment fund by Nanjing, the capital city of Jiangsu province, with the aim to boost the token economy and public blockchain projects in China.