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Blockchain technology to be used for cross-border forex transfer in China

Apr 29, 2019

China’s foreign exchange reserve regulator, the State Administration of Foreign Exchange (SAFE), jointly with the Hangzhou Blockchain Research Institute, has developed a blockchain platform for cross-border financial trades.

At present, a highly complex industry such as China's import and export financing system relies on manual, paper-based operation for processing. In order to resolve this, data will be stored on a cryptographically secured distributed network. By using a blockchain system, it will be possible to share this data instantly as well as transparently.

The aforesaid project uses a multi-signature mechanism to ensure the transactions are kept confidential, and details are only accessible for the companies involved in the deal alongside with regulators.

The initial development of the platform has been completed, SAFE most probably wants to pilot the project for six months in the three main trading provinces - Jiangsu, Zhejiang and Fujian – and two cities, Shanghai and Chongqing.

The project will be useful not only for business, but also help financial institutions better regulate the industry, as transactions would be processed quicker with fewer mistakes and as a result, fewer costs, as well as overall it will be possible to access more reliable data.

After the completion of the pilot project, which is expected to continue for six months, the platform will be adopted nationwide. It is also informed that many banks are involved in the project as well.

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