China’s third largest bank uses Blockchain to grant $300,000 loan
The Agricultural Bank of China (ABC), the country’s third largest bank in terms of assets, has granted a $300,000 loan in Guizhou province over a piece of land, according to Chinese media outlet Financialnews.com. This is the fist Blockchain-enabled loan used by the top bank.
The bank believes Blockchain technology is a tamper-proof system that effectively handles the challenge of double spending. It makes the manual process of approving credit applications easier and prevents loan seekers using a single property as collateral for multiple loans from different banks.
The distributed ledger technology is an efficient method to keep the stakeholders updated on the data on borrowers and their collateral, ABC said.
The bank believes Blockchain is the best way to provide financial services to farmers and businesses, especially in the rural parts of China.
While the Agricultural Bank of China had used land as collateral in the above-discussed loan, it is planning to use the Blockchain tech while accepting other types of assets as collateral as well.
Earlier, ABC announced that it was building a decentralized network to grant unsecured loans to agricultural e-commerce merchants in an automated way. These loans will be of smaller amounts.
Among other banks that are utilizing the revolutionary technology of Blockchain for lending purposes is BBVA. It is Spain’s biggest bank. It signed a long-term bilateral corporate loan worth 100 million euros with construction firm ACS using Blockchain technology.
BBVA stated the tech ensures the contract’s transparency and traceability.
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