Economics: China’s Central Bank Backs Blockchain Platform

ECONOMICS – The People’s Bank of China (PBoC) had begun the official pilot operations of the new trade and finance blockchain platform which it backed. This was according to reports of a local news outlet on September 12.

The Guangdong, Hong Kong, and Macao Dawan District Trade Finance Blockchain Platform envision of giving a blockchain-powered ecosystem for cross-border trading across Guangdong, Hong Kong, and Macau Bay Area. Based on reports, PBoC’s Central Bank Digital Currency Research and the Central Bank Shenzhen Central Branch have been jointly promoting and organizing the platform.

“Previously, trade financing costs for micro- to medium-sized enterprises were about 7 percent to 8 percent, but the blockchain system could cut the cost to less than 6 percent,” said Xu Honghui, vice president of the transaction banking division at Ping An Bank.

Moreover, Honghui said that the higher number of data – include credit, business, third-party assessment, and judicial department – put on the platform, the safer the blockchain would be. The platform has also the potential of putting the connection to the government supervision and logistics information systems in making more rooms to discuss information asymmetry issues, and inadequate data sharing, both domestic and overseas.

The platform’s first phase of trial operation is being run to give supply chain financing, according to reports. This is done to produce resolutions on hurdles, such as the insufficient data in the credit accumulation of small and micro enterprises, to credibly secure financing from financial institutions.

“Verifying the authenticity of trade background is an important part of business compliance. The information between banks is isolated […] to solve the problem of risk control, especially when it comes to receivables deduction [as well as] if there is a problem in the supply chain, the bank has no real-time information. This can only be solved through financial technology,” General Manager Hou Weirong of China Merchants Bank’s transaction banking department explained.

Moreover, the new platform envisions of influencing the transparent and immutable blockchain’s properties in order to operate a regulatory system that achieves “dynamic and real-time monitoring of various financial activities.” For instance, the system could make prevention of the same accounts from being used for the malicious acquisition of multiple loans from different institutions, the reports said.

Economics: Survey reveals NY surpasses London as the top financial center

On Wednesday, a survey revealed that New York has surpassed London as the world’s top financial center. This is amid the decision of Britain to leave the European Union, provoking banks to shift jobs outside the city for the preservation of access to Europe’s single market.

Britain voted to leave the EU two years ago. Since then, some powerful finance companies in London have been seeking a solution for the preservation of the cross-border flow of trading following Britain’s leave on the bloc in 2019.