The spread of the Coronavirus has alarmed citizens of the world and no other country has been more shaken up other than China. The Red Dragon has made significant efforts to curb the spread of the virus but each day seems to throw up a new challenge.
New reports showed that since the Chinese Lunar New Year, 87 businesses had received more than $200 million in loans through a cross border, pilot blockchain finance platform.
During the spread of the virus, private small-scale businesses were hit hard because of shutdowns as well as multiple people getting affected. These small scale businesses contribute to more than half of national economic growth and employment. The government has taken stringent steps to help their case. It was calculated that banks and financial institutions had supplied more than $76.9 billion in credit to tackle the problems caused by the virus.
The funds were transferred to those companies affected by the spread of the virus. Its a step up from the Chinese government’s efforts to improve private sector businesses’ access to financing. The news about the cross border transaction funds was revealed by Xuan Changneng, the Vice Director of the State Administration of Foreign Exchange.
The fact that large transactions were sent via the blockchain showed that Chinese individuals, as well as companies, were looking at the technology much more intently than before. Just last October, Xi Jinping had stated that blockchain technology would pave the way towards the future. Sources have claimed that the proposed Chinese blockchain pilot would settle a loan in just a day. At the same time, traditional loans take more than 6 days and can even extend up to weeks.
The upcoming platform will also allow rapid exchanges of different currencies. The Chinese city of Hubei has also joined the platform which will allow foreign businesses located there to benefit from greater transaction efficiency. Hubei is part of 170 corporate banks and 22 provinces, autonomous regions and municipalities to have joined the platform.
Henry Ma, the Chief Information Officer [CIO] at WeBank had stated:
“Due to the impact of the virus, the negative effects of previous pain points such as lack of trust in business, verification inefficiency, lack of information sharing and difficulty of timely supervision have been further amplified. The cross-border, financial blockchain services platform can play a bigger role, and help medium and small-sized enterprises improve the efficiency and convenience of getting export trade financing and other financial credit support”
Banking officials in China have also said that regulators can use blockchain to scrutinize transactions as well as take better steps to prevent hacks or fraudulent activities. The steady growth of blockchain in China has irked the United States with many companies in the west now joining the race to develop technologies for the betterment of society.