Postal Savings Bank of China (PSBC) has formally launched a blockchain-based asset custody system, executing more than 100 live transactions on the system during a two-month trial run.
PSBC worked with IBM and used the Hyperledger Fabric to create the first deployment in China. The launch comes off the back of a two-month pilot during which the bank completed over one hundred asset custody transactions involving buying and selling bonds.
Lyu Jiajin, president, PSBC, says the results demonstrated the capability of the technology to shake up a business in which multiple participants share and exchange data across a hotchpotch of disparate systems.
“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 a transaction," he says. "This technology has the potential to fundamentally transform the financial industry."
As one of PSBC’s core businesses, asset custody now represents an approximately four trillion RMB business. Using a combination of smart contracts and consensus mechanisms, the blockchain process enabled the real-time sharing of information by multiple parties, eliminated repeated credit verifications, and improved audit capabilities and risk management.
Says Jiajin: "Today, with a booming fintech and business innovation in the financial industry, we expect to join hands with more financial institutions to build the ecosystem for financial industry based on blockchain technology.”