Bank of Shanghai and CCB launch China’s First Blockchain-based LC
May 23, Bank of Shanghai and China Construction Bank (CCB) signed a blockchain cooperation agreement to launch China’s first domestic blockchain-based Letter of Credit (LC).
Different to traditional paper-based LC which is slow and vulnerable to errors, a blockchain LC based on cryptology and consensus mechanism is able to put all the relevant information, including paper vouchers, contracts, invoices, customs declarations on the chain. Once entered, information cannot be altered or tampered with.
Meanwhile, as more nodes join in the LC consortium blockchain, a multi-participation, multi-node LC chain can be formed which may speed up the documentary process and minimize security risk.
Bank of Shanghai also signed a blockchain strategic cooperation arrangement with Jiangsu HopeRun Software, a leading IT service provider. The bank has joined hands with the tech firm to launch a blockchain-based platform used in supply chain finance.
Bank of Shanghai intends to develop their supply chain finance business in 2018. With the technical support from HopeRun, the bank applied advanced technology, including big data and blockchain in their online platform to establish an open, win-win financial service system.
This platform may assist small-and-medium-sized enterprises in fund raising. In this instance, financial institutions may also fulfill their social duties better.
HopeRun Software is a listed enterprise provides IT solutions for financial institutions. They are experienced in product development and have formed a mature development system in blockchain field. This time, HopeRun cooperates with Bank of Shanghai, uses their advantages in different areas to build a blockchain platform which accelerate the innovation in supply chain finance.
Furthermore, Bank of Shanghai is also going to join hands with HopeRun to adopt blockchain in their Confirming Storage Financing, accounts receivable splitting and other businesses in the future. Bank of Shanghai has rich customer resources and strong financial strength, with supports from HopeRun in their blockchain products, technique and platforms enables credit funds flows into real economy.