The Bank of Communications, a bank owned by the Chinese government, has successfully issued mortgage-backed securities worth over $1.3 billion on infrastructure powered by blockchain.
In one of the biggest moves of its kind to date, the bank used an independent blockchain platform called Juicai Chain to issue the securities, worth a total of 9.3 billion yuan ($1.3 billion), China Securities Times reported.
Through the platform, all parties to the underlying loan are trackable, and can manage their cash flow as well as performing a number of other business operations on the blockchain. According to local press reports, the hope is that the system will improve security, limit risk exposure and improve the efficiency with which mortgage backed securities can be issued.
The technology also allows instant verification of the authenticity of the assets, as well as providing several other key benefits to would-be investors in these securities.
China has been notoriously hardline on cryptocurrencies and initial coin offerings (ICOs), effectively banning outright a large portion of activity in the cryptocurrency sector. However, conversely, the Chinese state is regarded as an increasing supporter of blockchain technology, with several notable deployments by government-backed organisations in the country.
Back in July, the Agricultural Bank of China issued a loan worth $300,000 on the blockchain, while in September, Chinese authorities signaled they may be willing to accept blockchain data as admissible evidence in legal cases.
The system pioneered by the Bank of Communications is one of many blockchain developments around real estate and real estate-backed securities, and the expectation now is that their successful launch will inspire similar moves from other financial institutions.
As reported in local media, Juicia Chain was first launched by the bank back in June, with initial due diligence beginning in August. Going forward, the digital mortgage base will now be opened to a number of intermediaries including law firm Zhonglun and global professional services company PricewaterhouseCoopers.
With the Agricultural Bank of China and the Bank of Communications accounting for the fourth and fifth largest banks in the country respectively, the new platform is now likely to have a significant effect on the way similar securities are issued in future.
Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.
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