Industrial and commercial Bank of China (ICBC), one of the “Big four” major state-owned banks in the country, has filed a patent application for a blockchain-based system for the exchange of financial assets.
According to the application filed in January and published last week, provides a platform through which financial institutions can function as sites for the formation of a distributed network.
When one of the institutions-users initiate a transaction request, it starts the smart contract. His performance makes each node to validate the transaction based on the information provided, including the account balance of the sender name and the payment amount. The transaction is completed, as soon as the network reach consensus above a prescribed threshold.
The concept aims to eliminate the middlemen and to improve the liquidity of financial assets recorded in the application. ICBC also explained that the current system of interbank and cross-border transactions is slow and expensive. And this applies to both regular payments and of transactions with financial instruments, including precious metals and futures.
“The traditional chain of transactions based on a centralized system of trust is associated with such problems as high cost, low efficiency, lack of stability and inflexibility. This hinders the process of entering the Bank on the market to meet the rapidly growing demand for innovative financial products,” the document says.
Recall that ICBC is in a group of 22 banks participated in the creation of a blockchain-based platform for cross-border payments on the basis of the software Corda R3.
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