Agricultural Bank of China Trials Blockchain Loans Backed By Landbr>
The Agricultural Bank of China (ABC) has issued its first agricultural mortgage using a blockchain system.
Founded in 1951, ABC is one of the “Big Four” banks in the People’s Republic of China. It has 320 million retail customers, 2.7 million corporate clients, and nearly 24,000 branches throughout mainland China, Hong Kong, London, Tokyo, New York, Frankfurt, Sydney, Seoul, and Singapore.
According to local news outlet Financial News, ABC issued a loan worth around $300,000 backed by a piece of agricultural land in the Guizhou province. In order to facilitate the loan issuance, the bank deployed a blockchain system across various node partners, including other commercial banks, the provincial branch of the People’s Bank of China, the Land and Resources Bureau and the Agriculture and Animal Husbandry Bureau.
The bank said the trial proved that blockchain can help streamline the process of approving loans by keeping all involved parties updated with the data of the borrowers and their collateral on a distributed ledger. The technology also eliminates the problem of double spending by allowing borrowers to use the same piece of land as collateral to apply for loans from different banks.
The project is part of the bank’s effort to improve access to loans for farmers and businesses. In the future, ABC said it intends to expand the application to issue loans backed by other types of assets, such as real estate.