China Merchants’ Bank successfully incorporates Blockchain technology into its business
As the pioneer and font-runner of cash management, China’s merchants bank have made a breakthrough in Blockchain technology by becoming the first bank to apply Blockchain technology into areas of Global cash management, cross-border direct settlement and unified account management.
Problems that CMB want to solve:
For CMB, the settlement between branches at different locations are problematic: data can only be exchanged between headquarters and overseas branches. The information exchange among branches overseas branches; manual approval procedure process is too long, the operating system is too complicated; the process for integrate new overseas branch is complicated, etc. With Blockchain technology, branches can share information on Blockchain and settlement requirement can be made between any two branches.
The new Blockchain-based system of CMB has presented brand-new advantages. First is high efficiency: the decentralized system decreases information transmission time from 6mintes to within seconds. Second is high security: it is difficult to mutate information recorded on a closed private chain; high stability; breakdown of any node will not affect the operation of the network as there is no core node; high scalability: new member can be quickly integrated to the whole network.
In the meantime, CMB is actively strengthening exchanges with foreign banks to set common standard related to cross-border payment with an aim to make direct settlement between different banks possible.
CMB’s successful application of Blockchain in its business system shows that Blockchain is practical rather a mirage. Blockchain can also be applied to other banking sector-related scenarios like promissory notes and supply-chain finance. Blockchain can also be applied between banks and other sectores. CMB is said to be determined to build itself as the leading bank in Blockchain application, making the convenience out of Blockchain available to the masses.
To be sure, many blockchain projects globally are still in their infancy, but the exploration from company and from the government(like PBOC’s move to promote its own digital currency) will promote the application of Blockchain technology.