JD.com is about to Issue Asset-backed Securities on A Blockchain
JD Finance, a subsidiary of Chinese e-commerce giant JD.com has released plans on Wednesday to issue asset-backed securities (ABS) on a blockchain.According to Securities Times, an outlet of the China Securities Regulatory Commission (CSRC), JD Finance’s ABS will be the underlying assets of this project while the Huatai Securities will serve as an underwriter and the Xinye Bank will act as a custodian institution.
This project may be marked as the first establishment of a multi-deployed consortium chain. JD Finance may also upgrade the underlying blockchain technology of their ABS Cloud Platform through this initiative.
By adopting this cutting-edge technology in the ABS project, each party involved in becomes a node and enable JD Finance to provide technical service to all the financial institutions participated in the asset securitization process. All the information related to the ABS underlying assets, the cash flow, financial products as well as accounting data can be shared and confirmed in real time among issuers, underwriters, buyers and intermediaries.
“The consortium chain must meet the actual needs of all participants in the asset securitization business in order to fully reflect the application value of blockchain technology. In the future, JD Finance will put more efforts in blockchain development and join hands with our strategic partners to provide more technical services to the financial institutions, regulatory agencies and distribution companies within the ABS ecosystem,” said Hao Yanshan, head of JD Finance.
The transparency and effectiveness of the information transformation may reduce the credit risk , improve operation efficiency and enhance investor confidence. Meanwhile, it may also provide timely and accurate data support to the regulatory authorities.
Actually, in addition to securitization business, brokerage firms can also apply blockchain technology in their asset management business to deal with credit default cases.
“The currently established asset securitization business management system is conducive to the prevention of risks of various ABS products and thus protects the interests of investors,” said by a senior executive from Huatai Securities.