Chinese Bank Zheshang, one of the most prominent financial institutions of the country has issued $66 million worth of securities via its proprietary blockchain platform.
The institution filed a prospectus based on public documents on 13th August with the Shanghai Clearing House. The filing was carried out with the aim of backing securities with a portfolio of account receivables from a range of companies.
The bank developed a blockchain powered platform named Lianrong with the aim of letting registered firms broadcast and distribute their account receivable assets to possible investors. Additionally, it will allow them to settle transactions of these invoices as securities in a peer-to-peer manner.
On buying a company’s account receivables, a stakeholder typically pays for the company’s pending invoice at a discounted rate with an expectation of collecting the full amount on a later date from the party that was initially liable to pay.
According to a report by China Securities Journal on 20th August, the Zheshang bank finished the issuance on 17th August to become the first commercial bank in the nation to have promoted transactions for securities backed by a group of assets on blockchain.
Zheshang bank was established in 2004 and is one among twelve publicly-traded financial institutions in China that have released different programs in the blockchain space. However, it’s not the only commercial bank that is moving towards implementing blockchain for providing asset-backed securities.
JD Finance, a subsidiary of JD.com, the Chinese e-commerce giant declared a plan to release a similar product through the distributed network by collaborating with another publicly-traded financial institution.