In recent days, China has emerged as the leading advocate of blockchain technology. The government itself is pushing for international collaboration in the development of blockchain applications for a range of industry segments. The country’s commitment towards cryptocurrency technology is exhibited by the China Merchants Bank which recently incorporated blockchain technology into its operations.
A Chinese cryptocurrency news portal has reported the inclusion of blockchain technology by the country’s leading banking institution known for its efficient cash management capabilities. According to the report, it has now become the first bank to use blockchain for global cash management, direct cross-border settlement, and unified account management.
By implementing the new-age technology, China Merchants Bank intends to reduce the time and effort involved in managing settlements between branches at different locations. The blockchain based system will enable the bank to reduce the time taken for transmitting information between its branches while improving the security at the same time. The China Merchants Bank has opted for a closed private chain over public chains like Bitcoin blockchain.
The publication reports that China Merchants Bank is also working with foreign banks to create a universal standard for cross-border payments. If successful, it will enable China Merchants Bank to execute direct settlements between different banks, increasing the efficiency even further. China Merchants Bank is expected to expand the blockchain implementation to its other operational segments in the near future.
Other potential applications of blockchain technology in the banking sector include promissory notes and supply chain finance. Some of these features have been already successfully tested by many banks across the world. With the backing of the Chinese central bank and other government organizations, China Merchants Bank aims to create a whole suite of blockchain applications for the banking sector. By doing so, it will position itself as a blockchain champion in the banking industry.
Ref: 8BTC | Image: Shutterstock