Postal Savings Bank of China (PSBC) has launched a blockchain-based asset custody system developed IBM using its Hyperledger Fabric . The system already executed more than 100 real business transactions on the blockchain since it went live in October 2016, involving the buying and selling bonds.
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The PSBC says that during the trial period, the system demonstrated blockchain’s ability to help streamline the traditionally complex credit verification process and manage risk, helping financial institutions operate more securely and efficiently. As one of the bank’s core services, asset custody now represents an approximately RMB 4 trillion ($575 billion) business.
The blockchain solution enables the real-time sharing of information by multiple parties and eliminates repeated credit verification, which reduces the operation process by about 60%-80% based on performance improvement data from PSBC. The smart contract and consensus mechanism also integrates investment compliance verification regulations into the blockchain. Furthermore, the bank explains that blockchain technology helps auditing and supervising parties quickly gain information, intervene and exercise control, thus improving the efficiency of risk management across the industry.
Lyu Jiajin, President, PSBC said: “Blockchain technology has the potential to eliminate the trust frictions in financial business activities at a very low cost and creates trust and enables the efficient exchange of information for all the parties involved in transaction. This technology has the potential to fundamentally transform the financial industry. Today, with a booming fintech and business innovation in financial industry, we expect to join hand with more financial institutions to build the ecosystem for financial industry based on blockchain technology.”
“The successful launch of PSBC’s blockchain-based asset custody platform demonstrates the high impact the technology can have on the financial industry. As the technology evolves, we expect to work with PSBC to define and develop new solutions, drive adoption of blockchain in more lines of business and support more organizations in China and around the world as they build their blockchain ecosystems and create a more efficient and trusted business environment,” said Chen LiMing, Chairman, IBM Greater China Group.