Despite cracking down on ICO’s last year, blockchain technology has continued to make great strides in China. There has also been rumblings of China working towards issuing its own digital currency. On top of this, many Chinese banks have made existing progress in the application of of blockchain technology to their services. The application of blockchain technology is expected to deal with the problem of trust in the financial field. As the technology develops, there should be more and more use cases in the financial services field.
Application of the Blockchain to the Finance Industry
In the last half year, after looking through announcements of the Shanghai and Shenzhen stock markets, 25 financial institutions in China have talked about the significance of blockchain to finance. These institutions include banks, insurance companies, and brokerage companies. With the rapid development of blockchain, increasing the investment and innovation of the financial technology has become a priority in the finance industry. The deep integration of finance and technology will greatly improve operational efficiency, expand service boundaries, and reduce operating costs, which in turn will lead to new business models and profit models.
Chinese Banks are Leading the Charge
Of the 25 institutions that talked about the importance of blockchain, 16 of them have already combined blockchain technology into their business. Of the listed financial institutions that have already announced blockchain applications, 15 are commercial banks. From a practical perspective, blockchain technology can be widely applied in the fields of bank payment, settlement and clearing, and credit reporting. Also, these are not just small banks that have made the plunge. Chinese banks including the big four, Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, and China Construction Bank, have explored the usage of blockchain technology in different aspects to great success.
ICBC uses blockchain technology primarily in the area of fund management. It is worth noting that ICBC applied blockchain technology to poverty alleviation and built a blockchain platform for poverty alleviation funds in Guizhou.
The Agricultural Bank of China applied blockchain technology to the e-commerce supply chain finance field for the first time, and launched the “e-chain loan” for agricultural internet e-commerce financing products. At the same time, it promoted the construction of a financial digital points system and built a leading area in the industry of blockchain integration to enhance customer experience.
World’s Largest Companies Moving Towards Blockchain
In addition, in the recently released Forbes Global 2000 list, many of the top 10 companies are already involved with blockchain or are taking initiatives to start. Among the top five companies, three of China’s state-owned banks are on the list: ICBC ranks first, Construction Bank ranks second, and Agricultural Bank ranks fifth. In addition, the Bank of China also entered the top ten, ranking ninth.
With all these large, global companies leading way, the future of blockchain adoption looks very bright.
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