China’s sixth-biggest bank, in assets, partnered with IBM to create a blockchain-based, asset custody based system. Postal Savings Bank of China, a
China’s sixth-biggest bank, in assets, partnered with IBM to create a blockchain-based, asset custody based system.
Postal Savings Bank of China, abbreviated PSBC, has commissioned a blockchain-based asset safekeeping system built by IBM using the Hyperledger Fabric it owns. From the time the system was launched in October 2016, it has executed over 100 real business dealings on the blockchain, relating to the purchase and sale of bonds.
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The PSBC reports that during the preliminary period, the system showed blockchain’s capability to streamline the conventionally complicated credit certification process while managing risks, aiding financial institutions to run more securely and more efficiently. Asset custody, being one of the financial institution’s primary services, accounting for about RBM 4 Trillion worth of business ( equivalent to 575 billion dollars)
The blockchain solution facilitates real-time sharing of data by several parties and removes repeated credit authentication, thereby decreasing the operation procedure by about 60 to 80 percent according to performance improvement information from PSBC. Additionally, the smart contract and agreement mechanism incorporates investment compliance authentication laws into the blockchain. Moreover, the bank expounds that blockchain technology aid auditing and supervising personnel quickly acquire information, intervene and control, thereby enhancing the efficacy of risk management in the entire industry.
Lyu Jiajin, the president of PSCB, held: Blockchain technology is capable of eliminating the trust issues in financial business transactions at an inexpensive cost and increases trust and facilitate efficient exchange of info for all the transacting parties. The technology can, potentially, transform the banking industry. Currently, in the backdrop of a booming fintech coupled with the business invention in the banking sector, we anticipate partnering with more financial organizations to create the system for the financial sector based on blockchain technology.
The fruitful launch of Postal Savings Bank of China’s blockchain-based asset safeguard platform shows the tremendous impact the technology can cause on the banking industry. As the technology advances, we foresee working with PSBC to outline and come up with new solutions and stimulate adoption of blockchain in other lines of business. Additionally, we expect to support more institutions, not only in China but also globally, as they develop their blockchain systems and build a more efficient and reliable business atmosphere, said Chen LiMing, who Chairs IBM Greater China Group.