China’s Bank of Communications issues mortgage-backed securities using blockchain
The Chinese Bank of Communications (BoCom), which is the fifth largest bank in China and one of the four state-owned banks in the country has successfully completed the issuance of the first phase of personal housing mortgage-backed securities using blockchain, China Securities Times reported on Thursday.
According to the report, this project is the first credit asset securitization project based on the blockchain asset securitization platform “Guicai Chain” independently developed by Bank of Communications. The bank used the platform to issue 9.3 billion yuan worth of RMBS, which is equivalent to $1.3 billion.
The report further notes that by using the technology all parties can complete asset screening, due diligence, cash flow measurement, and other business operations on the chain. This reduces operational risk, shortening the issuance cycle, and allows all the participants to view the details on the chain in real-time to ensure authenticity and effectiveness of the disclosure.
According to reports by the local media outlet Xinhua, ‘Juicai Chain’ was launched by the Bank of Communications in June. The first phase of issuing digital RMBS began in July, with the first due diligence conducted in August.
While China has been hard on cryptocurrencies, it has embraced blockchain technology with open arms. Earlier this month, a new trade and finance blockchain platform, backed by the People's Bank of China (PBoC) started official pilot operations in Shenzhen, as BC Focus reported. The platform is dedicated to building an open financial and trade ecosystem based on the Guangdong, Hong Kong, and Macau Bay Area, facing the country and radiating the world.
China is not the only country which is testing the viability of blockchain in the real estate industry. Earlier this month, Raiffeisen Bank’s Russian branch successfully issued its first electronic mortgage using a decentralized depositary system (DDS) on the blockchain platform ‘Masterchane’.
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