Popular as a major commercial bank in China and one of the largest public companies in the world, China Everbright Bank (CEB) is working on introducing a blockchain-based supply chain finance solution in partnership with Ant Financial.

Ant Financial, which is widely recognized as the financial arm of the Chinese e-commerce giant, Alibaba, teams up with China Everbright Bank to collaboratively implement Duo Chain – a network services platform designed to handle supply chain-related financial transactions.

Ant Financial Starts Its Work on the Duo Chain Since 2019 5295605479

The partnership between CEB and Ant Financial establishes during the Q2 of 2019. CEB is the first Chinese bank to deploy Ant Financial’s distributed ledger technology, Duo Chain. The report comes first in the local finance-focused publication, Sina Finance, on March 12. According to the press report, Ant Financial originally unveiled the technology in 2019 as a catalyst to boost supply chain finance using blockchain technology.

Per the definition, supply chain finance (SCF) is an optimization tactic commonly practiced to offer efficient financing of the value chain. The goal of both parties – buyer and seller – is to reduce working capital, and improve cash flow at a diminished cost by deploying the buyer’s credit rating. As such, SCF offers short-term credit which allows buyers to extend their payment terms and enables supplies to receive earlier payments.

A number of companies worldwide have already deployed blockchain-based SCF solutions to date in an effort to increase the transparency of transactions and optimize costs of credit access. For example, London-based bank and financial services firm, Standard Charted Bank, completed its first joint blockchain-based supply chain financing transaction in August 2019. Previously, China Shipbuilding Industry Company partnered with Shanghai Bank to develop a blockchain-based online supply chain finance platform in 2018.

China’s Commercial Bank Aims at Improving Security of SCF Transactions with Blockchain

China Everbright Bank intends to improve the security of its SCF transactions, and eliminate fraudulent transactions by allowing the integration of its system with Ant Financial’s DLT. As reported by Sina Finance, the Duo Chain platform facilitates users to complete their identity verification and electronic signatures with CEB while recording all relevant transactions to a distributed ledger for tracking purposes.

CEB reportedly added that the bank also integrated internal and external data management platforms, enterprise credit platforms, and other connected systems to raise the efficiency and quality of its financial services.

The Duo Chain technology deployment isn’t the first move to blockchain made by CEB. In early 2019, China Everbright Bank reportedly became a member of a major local blockchain banking project, the Trade and Finance Interbank Trading Blockchain Platform. The platform was launched by China’s self-regulatory bank organization, the China Banking Association, in December 2018.