Agricultural Bank of China Issues A $300,000 Loan Using Blockchain Technology
One of the largest banks globally in terms of total assets, The Agricultural Bank of China (ABC), has finished issuing a loan worth a whopping sum of $300000 by utilising a blockchain network. Its branch in the Guizhou province saw the first round of testing for the blockchain technology, with a loan being issued against a collateral of agricultural land, according to local news reports published on 31st July
In order to make sure the process went smoothly, ABC deployed the blockchain system over several node partners such as the People’s Bank of China. With a distributed ledger for updating and recording data with regard to loan status, recipients and collaterals, ABC is hoping to streamline the traditional process of loan grants. This is done by eliminating possibilities of tampering or double spending (use of same collateral across various banks). By bringing in blockchain technology, ABC is attempting to promote greater access and adoption among farmers and land owning businesses in Chinese villages.
After the primary test, ABC is aiming towards further expansion of the application so that it can grant loans against various other kinds of assets in the future, including but not limited to real estate. ABC is one of the four largest government-controlled commercial banks in the country and maintains listings in both Hong Kong as well as its home country, mainland China, with assets worth about 3 trillion dollars as of December last year.
According to its annual filing which was published in the first half of this year, this state-controlled bank has also focused on the development of a network that is largely decentralised to make sure it becomes possible to issue smaller and less secure loans to e-commerce merchants operating in the field of agricultural and allied products. This process of issuance is expected to be automated and is an interesting possibility that is very clearly on the cards for the bank, one of the “Big Four” of China. China has seen an upsurge in blockchain adoption, with 12 out of 26 publicly listed banks already having begun exploring solutions on blockchain technology.