Chinese Bank Finalized Issuance Process of $16.9 Billion Blockchain-based Commercial Paper

By Anne W. | June 9, 2020

The China-based Zhe­shang Bank has reportedly finalized the issuance process of an asset-backed commercial paper (ABCP), with the help from blockchain

Specifically, the paper, equivalent to $16.93 billion, was reportedly generated as an initiative of the Na­tional As­so­ci­a­tion of Fi­nan­cial Mar­ket In­sti­tu­tional In­vestors’s (NAFMII) pilot program for ABCPs. 

The ABCP – goes by the name “Lianxin 2020 Lian­jie First Phase As­set-backed Com­mer­cial Pa­per” – with an effective time frame reportedly lasting to 6 months, with the duration of the next issuance it to be decided later. 

A NAFMII spokesperson reportedly stated that the involvement of blockchain would equip corporations with a “direct channel to markets, help­ing to greatly in­crease the ac­ces­si­bil­ity of busi­ness fi­nanc­ing.”

The Lianxin ABCP release will reportedly SMEs is accessible to support financially, via “increasing the ac­ces­si­bil­ity of fi­nanc­ing for SMEs that have dif­fi­culty with fi­nanc­ing via di­rect debt is­suance”. 

The paper will reportedly also finalize integration of supply chain finance with small, medium, and micro-enterprises for further assistance with their production. 

The central bank of China and different large banks are reportedly trying to increase the adoption rate of blockchain in traditional finance, with the PBoC came up with a proposal for a blockchain-powered trade finance platform, for the Guangdong-Hong Kong-Macao Greater Bay Area.

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