China‘s State Administration of Foreign Exchange (SAFE), the administrative agency that oversees the country’s forex market activities, has decided to expand its Blockchain-based cross-border financing initiative. From the initial count of nine, the program will now cover a total of 19 provinces and cities. GlobalTimes reported the development on November 11.
The industry somehow expected the development as the deputy head of SAFE, Lu Lei, announced in late October the plans of the agency to harness the potentials of Blockchain and artificial intelligence (AI) in cross-border financing. Lei emphasized back then that the program would focus on developing applications for risk management.
SAFE’s cross-border financing project was first unveiled in March. As per the official announcement, the agency seeks to provide data verification and other financing services for international businesses and entities. The system relies on the Blockchain platform created by the ZhongChao Blockchain Technology Research Institute in Hangzhou.
Cao Yin, a Blockchain analyst, describes the benefits of the Blockchain-based project. He emphasized that the risk of financial fraud has been reduced since the verification and authorization of information do not involve human intervention. Instead, the system relies on a decentralized infrastructure in terms of tracking each capital flow. The less human mediation there is, the less room for mistake.
Yin also emphasized that aside from being able to supervise activities in real time, Chinese exporters don’t have to wait for 2 days to complete their transactions since the platform can process everything in 15 minutes.
By the end of October, all of the participating financial institutions have been given access to the innovative cross-border financing platform.