- China’s Exim Bank’s Xiamen Branch became the first policy bank to use blockchain technology.
- The Export-Import Bank Xiamen Branch not only enthusiastically applied but also worked with State Administration of Foreign Exchange’s.
- The Cross-Border Financial Blockchain Platform can be used to conduct the foreign exchange payment by the bank branch.
The transaction facilitated by the State Administration of Foreign Exchange’s “Cross Border Financial Blockchain Platform.” The move, which hailed as a significant milestone for Chinese efforts to “seize the opportunity” of the emerging blockchain technology in the country.
As directed by the Xiamen Branch State Administration of Foreign Exchange, the Export-Import Bank Xiamen Branch not only enthusiastically applied but also worked with State Administration of Foreign Exchange’s “Cross-Border Financial Blockchain Platform” to achieve this feat of becoming the first branch in the Chinese banking system to indulge with blockchain technology.
Xiamen Shipbuilding Industry Co., Ltd, which designs, manufactures and exports ships and marine petroleum equipment, applied for cross border foreign exchange payment with the Export-Import Bank of China’s Xiamen Branch on January 2nd 2020.
The traditional business model requires enterprises like the Xiamen Shipbuilding to begin by filing with the tax department. Then, the enterprise must produce the tax filing form in the bank window for foreign exchange payments.
After this, the banks perform audits in regards to the papers and tax filing form given by the enterprise. Even after a rigorous process, there is a possibility of additional screening and redoing the entire process, which can be risky and time consuming for the enterprises.
The Cross-Border Financial Blockchain Platform can be used to conduct the foreign exchange payment by the bank branch. This new blockchain-powered business model allows enterprises to reduce transaction costs and saves them from multiple round-trip costs which were an inherent part of the traditional system.
It also reduces the risk of bank authenticity audits and proves to be a win-win for all stakeholders involved, be it the state, the banks or the enterprise.
President Xi Jinping had mainly spoken about the emergence and significance of blockchain technology in his October 2019 Address. He had announced that China would embrace blockchain technology across platforms and industries in a mission to emerge as a world leader.
-he had said. This move seen as a landmark achievement in the Banking and Finance industry in particular and China in general.