CMB And Wing Lung Bank Clears 1st Blockchain-based Cross-border RMB Settlement
29 December 2017, Hongkong-As per report by Sohu, Wing Lung Bank and its parent bank, China Merchants Bank, said in recent update that both parties have completed the first cross-border RMB clearing using the Blockchain technology on December 20. The company also pointed out that blockchain technology can reduce operating costs, which in turn would reduce customer spending accordingly.
Feng Xuefeng, GM of Wing Lung Bank, said that the cross-border RMB clearing used to take several hours because of the involvement of banks and input of customer information. With adoption of blockchain technology, the whole process is reduced to several minute by removal of manual intervention. He also pointed out that Wing Lung had already cooperated with China Merchants Bank in February this year to utilize blockchain technology to process payment of USD and HKD. So far, more than 23,000 remittance has been conducted with the amount of over 4.2 billion HKD.
Li Gongzheng, GM of CMB’s Interbank Client Department, said the cost of manpower and operating resources was reduced by 60% by using blockchain technology to handle cross-border RMB clearing. As the technology matured, the customer charges were also expected to be lowered. He pointed out that the traditional cross-border RMB clearing involves many banks and system transactions and message communication process is cumbersome. By using blockchain technology, the message can be delivered to all agencies in real time to make it more efficient and transparent. He also believed that the cost-saving effect would be enhanced with even more participants. In the future, China Merchants Bank plans to include all overseas institutions into the clearing project. At the same time, CMB will also invite interbank customers to join in the program to build a bigger cross-border blockchain-based clearing platform.
Li revealed that as a direct member in the Cross-border Interbank Payment System (CIPS), CMB has been acting as correspondent bank for about 100 interbank clients to settle RMB trading. It is expected that these indirect banks will gradually participate the blockchain clearing platform.