Agricultural Bank of China Trials Blockchain-Based Loan Issuance System

During the last couple of months, China’s attitude towards blockchain technology has actively improved. Now, local reports indicate that the Agricultural Bank of China (ABC) has implemented a blockchain-based system for loan issuance purposes.

In a trial run for the platform that took place in the Guizhou province, the ABC has used blockchain technology to issue a 2M Yuan loan, equal to approximately $300,000. The loan was backed by agricultural land, in the form of collateral.

The technicalities behind the platform are interesting to look at. For loan issuance purposes, the blockchain system utilizes nodes present in several institutions, including the People’s Bank of China and the government’s Bureau for Land and Resources.

According to the Agricultural Bank of China, the initiative is part of the bank’s three-year action plan targeting fintech innovation, alongside an effort to make it easier for businesses and farmers to access loans.

The benefits associated with the system include a more streamlined process for receiving loan approval – as such, all parties are kept updated in real-time on the status of their loan, while also being given data on borrowers and loan collateral. Apart from this, the blockchain-based system will remove double-spending attempts, where individuals and businesses attempt to get multiple loans from banks by offering the same piece of land as collateral.

If no problems arise, the ABC will utilize the system to issue loans backed by different types of collateral, apart from agricultural land.

Not only this, but as mentioned above, the bank is also focusing on their three-year action plan for fintech innovation. This means that more advanced systems will be deployed for artificial intelligence, big data, information security, cloud computing and mobile internet purposes.