Postal Savings Bank of China reports success in blockchain-based platform
The Postal Savings Bank of China (PSBC) has successfully conducted more than one hundred business transactions on its blockchain-based platform, the company has announced.
The asset custody system, which was developed with IBM using the Hyperledger Fabric, went live in October 2016. The transactions, which involved buying and selling of bonds, were completed during a two-month trial operation after completion of a Design Thinking workshop and joint development work with IBM.
During the trial, the system demonstrated blockchain’s ability to help streamline the traditionally complex credit verification process and manage risk, helping financial institutions operate more securely and efficiently. The asset custody is one of PSBC’s core businesses, which represents an approximately four trillion Chinese Yuan (£475bn) business.
The process involves multiple parties, including financial institutions, clients, asset custodians, asset managers and investment advisors and auditors. Each transaction involves the settlement of large sums of money and multiple participants exchanging data, each with its own information system and often relying on verification systems such as telephone, fax and mail, potentially creating delays, discrepancies and risk with reporting between entities.
PSBC’s blockchain system allows sharing of information by multiple parties in real-time. It eliminates repeated credit verifications, reducing the operation process by about 60%-80% and helps make information exchanges more efficient.
The smart contract and consensus mechanism integrates investment compliance verification regulations into the blockchain, and ensures that transactions are completed after contracts are satisfied and a consensus is reached. The immutability and encryption built into the blockchain ensures that account information remains secure while allowing the quick sharing of necessary information by transaction participants.