As reported by the local news source Financial News, a local news source, the Agricultural Bank of China (ABC), which is one of the “Big Four” state-owned commercial banks in China, has completed the issuance of a loan worth $300,000 using a blockchain system.
In fact, the technology was first tested by the bank in one of its branches in China’s Guizhou province, where a loan backed by a piece of agricultural land as collateral was issued.
To facilitate the process, the ABC said the blockchain system is deployed across various node partners, including other commercial banks, the provincial branch of the People’s Bank of China and the local government’s Land and Resources Bureau.
By having a distributed ledger to keep parties updated with data on borrowers and their collateral, the bank said the tamper-proof blockchain can streamline the manual process of loan approval and eliminate the problem of double spending – borrowers using the same piece of land as collateral to apply for loans from different banks.
The blockchain application aims to aid the bank in garnering wider access to loans for farmers and businesses that own agricultural land in rural China.
After the initial test, the Bank is also working towards expanding the application to issuing loans that are backed by other types of assets, including real estate in the future.
Listed in both mainland China and Hong Kong with total assets of $3 trillion as of December 2017, the ABC is China and also the
The ABC, the fourth largest bank in the world by total assets, has also developed a decentralized network to issue small unsecured loans to agricultural e-commerce merchants via an automated process, according to its annual filing published early this year.