Blockchain ABS platform gaining popularity among China's financial institutions
Sep 27, 2018 (China Knowledge) - China’s Bank of Communications (BCM) and PingAn Insurance Co., Ltd have announced successively to set up a blockchain Asset-backed Securities (ABS) platform to build ABS ecosystem for medium and small financial institutions.
Using blockchain technology can increase the transparency of underlying assets, comply with the principle of penetration, and increase ABS asset liquidity. This technology is also good for regulation, making transactions between financial institutions traceable, and the space for violations shrinking.
ABS platform is gaining popularity in China, but the overall scale is still far from that of developed countries. The information opacity and asymmetry, difficulty in issuing management, single sales channel and low efficiency of asset operation were the core challenges of industrial development. Therefore, many institutions have launched the blockchain ABS platform to solve these problems.
In June this year, BCM officially launched the first full-process blockchain ABS platform. And last week, PingAn’s subsidiary held a press conference in Shenzhen to announce the official launch of Alpha intelligent ABS platform.
By comparing the publicity materials of BCM and PingAn’s subsidiary, there are many similarities, including smart contracts, penetration of underlying assets, real and immutable information on the chain, remodeling of the whole process business of ABS in investment bank, and the ultimate goal of both parties is the same: enabling small and medium-sized banks and other institutions.
According to the assumption of BCM, the building of blockchain ABS platform will take three steps:
Version 1.0 serves BCM and promotes the development of BCM's ABS business, such as credit card installment and personal housing mortgage loan; Version 2.0 serves BCM’s customers, helping enterprise customers, especially small and medium-sized enterprises to realize low-cost and convenient financing; Version 3.0 serves inter-bank financial institutions, helping inter-bank institutions, especially small and medium-sized Banks, to achieve financing.
After the completion of above mentioned three phases, BCM’s platform will become an industrial platform.
On the other hand, PingAn’s subsidiary also expressed the hope to build the ABS ecological community and achieve win-win results in the future.
However, there are still many difficulties to be overcome in the application field of blockchain technology. The efficiency, stability and security permission mechanism of private data protection of blockchain technology architecture are still the current difficulties in applying blockchain technology.
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