The People’s Bank of China (PBoC) recently helped in the launch of a trial Finance Blockchain platform in China. The Guangdong-Hong Kong Macao Great Bay Area platform is located in Shenzhen to the south of Guangdong Province. Incidentally, the country has always supported blockchain technology but has smacked down heavily on cryptocurrency banning all the virtual currency transactions across China.
Rather, many believe that the Chinese government has devised different approaches for virtual currencies and blockchain technology. As a part of its support-approach towards blockchain, the country legalized the use of information verified by blockchain for settling court cases related to the internet. According to an analyst at Beijing-based iResearch, Li Chao, China will always support blockchain as it is an advanced technology that has been adopted by many countries.
Chao believes that the country does not want to lag behind when it comes to adopting the latest technologies. Importantly, blockchain guarantees highly efficient and safe information-sharing process. It also reduces the financing costs for all types of enterprises irrespective of their sizes.
Blockchain China wants to take advantage of the speed and efficiency that blockchain technology offers. Generally, a traditional trade financing round takes around two weeks to complete. However, when supported by blockchain, it will take only 20 minutes which is a huge difference, says Live Bitcoin News. With such a drastic reduction in the time taken for completing the transaction, it would also make a big impact on the cost.
While talking about saving with the blockchain technology, the Vice President of Ping An Bank’s banking division, Xu Honghui, said that earlier trade financing costs for both micro and medium-sized enterprises were approximately 7 to 8 percent. However, blockchain can cut down this expense to below 6 percent.
According to Forbes, the Chinese government is focusing on blockchain development in China because it considers domestic stability more important above all. The country has stopped big American names like Facebook from accessing its market. At present, by banning cryptocurrency and exclusively focusing on the blockchain, the Chinese government is following the same strategy.[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. ]