Sri Lanka's expat remittances up in June '25    CBE's Abdalla attends Arab central bank governors' meeting ahead of Sept summit    Egypt's gold prices grow on July 13th    Egypt's Health Min. discusses drug localisation with Sandoz    New expansion projects, public-private partnerships to modernize, localise industry: El-Shimy    Al-Sisi attends high-level African summit to strengthen continental coordination, regional integration    Al-Wazir inaugurates glass factory, lays foundation stone for new appliance plant at Elaraby Group    Egypt, Mexico discuss environmental cooperation, combating desertification    Egypt launches anti-drug awareness campaign for drivers    HDB expands national footprint with 'Acacia' branch in New Cairo    Lavrov warns against anti-Russia alliances in Asia during North Korea visit    Germany faces recruitment hurdles in push to rearm, eyes conscription    Needle-spiking attacks in France prompt government warning, public fear    Foreign, housing ministers discuss Egypt's role in African development push    Egypt's EDA, Haleon discuss local market support    Korea Culture Week in Egypt to blend K-Pop with traditional arts    Egypt, France FMs review Gaza ceasefire efforts, reconstruction    CIB finances Giza Pyramids Sound and Light Show redevelopment with EGP 963m loan    Greco-Roman tombs with hieroglyphic inscriptions discovered in Aswan    Egypt reveals heritage e-training portal    Three ancient rock-cut tombs discovered in Aswan    Egypt condemns deadly terrorist attack in Niger        Sisi launches new support initiative for families of war, terrorism victims    Egypt's GAH, Spain's Konecta discuss digital health partnership    Egypt expands e-ticketing to 110 heritage sites, adds self-service kiosks at Saqqara    Egypt's Irrigation Minister urges scientific cooperation to tackle water scarcity    Palm Hills Squash Open debuts with 48 international stars, $250,000 prize pool    Egypt's Democratic Generation Party Evaluates 84 Candidates Ahead of Parliamentary Vote    On Sport to broadcast Pan Arab Golf Championship for Juniors and Ladies in Egypt    Golf Festival in Cairo to mark Arab Golf Federation's 50th anniversary    Germany among EU's priciest labour markets – official data    Cabinet approves establishment of national medical tourism council to boost healthcare sector    Egypt's PM follows up on Julius Nyerere dam project in Tanzania    Paris Olympic gold '24 medals hit record value    A minute of silence for Egyptian sports    Russia says it's in sync with US, China, Pakistan on Taliban    It's a bit frustrating to draw at home: Real Madrid keeper after Villarreal game    Shoukry reviews with Guterres Egypt's efforts to achieve SDGs, promote human rights    Sudan says countries must cooperate on vaccines    Johnson & Johnson: Second shot boosts antibodies and protection against COVID-19    Egypt to tax bloggers, YouTubers    Egypt's FM asserts importance of stability in Libya, holding elections as scheduled    We mustn't lose touch: Muller after Bayern win in Bundesliga    Egypt records 36 new deaths from Covid-19, highest since mid June    Egypt sells $3 bln US-dollar dominated eurobonds    Gamal Hanafy's ceramic exhibition at Gezira Arts Centre is a must go    Italian Institute Director Davide Scalmani presents activities of the Cairo Institute for ITALIANA.IT platform    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



China taps blockchain tech to boost financing for coronavirus-hit businesses
Published in Amwal Al Ghad on 16 - 02 - 2020

As authorities in China are rushing to support businesses struggling to survive the effects of the new coronavirus, blockchain technology is emerging its potential in an archaic financing system.
Since the Lunar New Year holiday, 87 China-based businesses have gotten more than $200 million in loans through a cross-border, pilot blockchain finance platform, Xuan Changneng, vice director of the State Administration of Foreign Exchange, announced at a press conference on Saturday. Changneng did not specify a date.
The holiday, which is also known as the Spring Festival, was extended by three days to February 2 in an attempt to limit the spread of a pneumonia-causing virus that has now killed more than 1,500 people. More than half of China further delayed the shutdown by at least a week and many parts of the country are still far from resume operations normally.
″ (Due to the impact of the virus), the negative effects of previous pain points such as lack of trust in business, verification inefficiency, lack of information sharing and difficulty of timely supervision have been further amplified," Henry Ma, chief information officer at Tencent-backed online lender WeBank, said, according to a translation of his Chinese-language statement by CNBC.
"The cross-border, financial blockchain services platform can play a bigger role, and help medium and small-sized enterprises improve the efficiency and convenience of getting export trade financing and other financial credit support," Ma added.
Privately-owned, smaller businesses are among the hardest affected by the virus' disruptions. In the past few weeks, central and local governments have made a flurry of announcements to back these smaller businesses, which contribute to more than half of national economic growth and employment.
It's a step up from the national government's efforts of the past few years — to try to improve privately-owned businesses' access to financing in a state-dominated system with no established credit score records and a preference for state-run enterprises.
As of noon on Friday, banks and financial institutions have supplied more than 537 billion yuan ($76.9 billion) in credit to fight the coronavirus, Liang Tao, deputy head of the China Banking and Insurance Regulatory Commission, said on Saturday at the same press conference in Beijing.
Blockchain is the same technology behind cryptocurrencies like bitcoin. Trading of the digital currencies is officially banned in China, however the country has been rapidly pressing ahead with the development of blockchain. In October, Chinese President Xi Jinping emphasised the need for the country to become a leader in the technology sector.
In theory, a blockchain-based system enables users to create a permanent record of key documents that is easily accessible. This gives lenders a basis of trust and enables them to quickly assess how much money they can safely loan someone. For the Chinese platform pilot, a state media report said it can take just a day to apply for and secure a loan on it. In contrast, traditional loan applications in China can take days or weeks.
WeBank's Ma also highlighted that with blockchain, regulators can better scrutinize transactions and respond more quickly to fraud or risks.
In March 2019, China's foreign exchange regulator launched the "cross-border finance blockchain services platform pilot" As of Feb. 3, it had processed $15.9 billion in loans to around 2,500 businesses, three-fourths of which were medium and mid-sized enterprises, Xuan stated. He pointed out that over 170 corporate banks have joined, along with 22 provinces, autonomous regions, and municipalities.
In addition to building trust, blockchain helps rapid exchanges of different currencies. The Chinese platform is already handling foreign currencies, and Xuan said on Saturday that since Hubei province joined the platform in January, foreign businesses located there can benefit from greater efficiency in areas like export trade financing.
Alex Yang, chief executive of blockchain development company V.Systems, said the blockchain system implemented here is a closed one, in which one entity retains control. That removes some technical hurdles that open source "public" and "decentralized" financial blockchain systems face in achieving the same goal, he added, according to a CNBC translation of his Mandarin-language notes.
Yet, Yang said "if there are more and more applications, and more financial institutions pay attention, then it will be good for the development of blockchain."
Source: CNBC


Clic here to read the story from its source.