The Agricultural Bank of China (ABC), one of the world’s major banks with total assets, has accomplished the issuance of a loan worth $300,000 with the help of the blockchain system.
The bank tested the expertise for the very first time in one of its divisions in China’s Guizhou province, delivering a loan backed by a piece of farming land as surety.
To facilitate the process, the ABC stated that the blockchain system is organized across numerous node partners, including additional commercial banks, the local branch of the People’s Bank of China and the local government’s Land as well as Resources Bureau.
By having a dispersed ledger to keep parties updated with data on mortgagors and their collateral, the bank mentioned that the tamper-proof blockchain can rationalize the physical procedure of loan approval and remove the problem of double spending where borrowers are using the same piece of land as security to apply for loans from various other banks.
The blockchain technology is part of the bank’s determination to bring broader access to loans for farmers and traders that own agricultural land in rural China. Following the initial test, the ABC aims to develop the application for distributing loans that are backed by other sorts of assets, such as real estate in the future.
The ABC is known to be of the largest four state-owned commercial banks in China and also the fifth largest bank in the world with total assets. Listed in both Hong Kong and mainland China with total assets of $4 trillion as of December 2017.
As per the news published in Coin Telegraph, the ABC’s annual filing showed the state-owned entity has also established a decentralized network to issue small unsafe loans to agricultural e-commerce merchants through an automated process. At present, out of the 26 publicly listed banks from China, 12 of them have already started working on blockchain technology.[The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views and/or the official policy of the website. ]