Everyone talks about decentralization, so how should the banking industry develop blockchain?

Nonsense

Nonsense

At present, the application of blockchain technology in the domestic banking industry of banks can be roughly divided into two categories, one is the blockchainization of the bank's own business, and the other is cooperation between banks using blockchain technology.

Eleven years ago in January, the world's financial industry was trembling under the cloud of the 2008 financial crisis. Veteran financial giants such as Lehman Brothers and Merrill Lynch collapsed as soon as they said they would, and governments of various countries stepped in to rescue the banking industry that was on the verge of collapse. On January 3, 2009, Satoshi Nakamoto quoted the title of The Times in the first block of Bitcoin, The Times 03/Jan/2009 Chancellor on brink of second bailout for banks. (2009 1 Chancellor on the verge of implementing a second bank bailout on 3 March). This also makes the blockchain technology inherently bring the aura of disruptors in the banking industry.

Adhering to the idea of ​​joining if you can't beat it, today, eleven years later, the banking industry has become the most active explorer of blockchain technology. The five major state-owned banks, ICBC, Agricultural Bank of China, Bank of China, China Construction Bank, and Bank of Communications, all have their own blockchain platforms. Among joint-stock banks, China Merchants, Minsheng, Ping An, and Zheshang also have their own blockchain platforms. Even the People’s Bank of China also has its own blockchain platforms. Leading the establishment of the Guangdong-Hong Kong-Macao Greater Bay Area trade finance blockchain platform. After the 1025 speech, the banking industry once again presented a scene of thousands of sails competing in the era of mobile payment.

It should be noted that domestic banks paid attention to blockchain technology much earlier than the 1025 speech. As early as 2017, Minsheng Bank and China CITIC Bank jointly launched a relatively complete domestic letter of credit blockchain application, and the technical attempts and attention were earlier. A technical director of the Bank of Jiangsu told the ChainDD app that in 2016, the Bank of Jiangsu had tried a small-scale point exchange system based on blockchain technology, and users could use point tokens to exchange for ice cream at designated outlets.

At present, the application of blockchain technology in the domestic banking industry of banks can be roughly divided into two categories, one is the blockchainization of the bank's own business, and the other is cooperation between banks using blockchain technology.

1. Blockchain transforms banking business Bank

The blockchainization of its own business refers to taking the roles of departments at all levels, users, and regulators within the bank as nodes, and incorporating relevant enterprises and government agencies into the alliance chain to improve communication efficiency, simplify the process, and ensure information transparency. A more typical case is the ICBC Blockchain Targeted Poverty Alleviation Platform.

The core of the targeted poverty alleviation platform jointly established by ICBC and the Guizhou provincial government is to enable the fine-grained supervision of poverty alleviation funds. As of November 2019, nearly 5,000 poverty alleviation funds under the plan have been allocated, with an allocation of more than 7 billion yuan.

Wang Hui, associate professor of business administration at Shanghai University of International Business and Economics, believes that the advantages of blockchain technology in targeted poverty alleviation include the following three points:

First, based on the characteristics of decentralization, information such as the degree of poverty and the causes of poverty are uploaded to the blockchain platform to help poverty alleviation workers more accurately identify who meets the poverty standards.

Second, non-tamperable modification ensures the authenticity of data and financial security. At the same time, the application of smart contracts effectively reduces the number of manual interventions and further prevents data falsification.

Third, transparency enables real-time sharing and transmission of information. Administrative departments and financial institutions realize cross-chain integration and automatically enter the supervision system, thereby realizing full-process supervision. Then use traceability to track the upstream and downstream of the information, such as who initiated the fund and who approved it, can be queried on the system to ensure that the responsibility of all links is assigned to the person, thereby improving the transparency of the entire poverty alleviation work.

But he also believes that blockchain technology also has some problems in precision poverty alleviation. On the one hand, information barriers are serious. A perfect information sharing mechanism will help realize information exchange and improve work efficiency. In order to achieve information sharing, blockchain technology needs to incorporate government departments, financial poverty alleviation agencies, poverty alleviation targets, and multiple social assistance subjects into an exclusive information and data management platform. However, at present, the information of each participant is in a state of localization, fragmentation, and discontinuity, and real-time sharing has not been realized. The data standardization docking system of the participants has not yet been established.

On the other hand, technology coverage in poor areas is difficult. At present, the ecological environment in most poverty-stricken areas in my country is extremely harsh, and the infrastructure construction is relatively backward, which can only meet basic living needs. The application of blockchain in targeted poverty alleviation requires impoverished households at each node to participate in data entry, proofreading, and verification, as well as related hardware equipment such as computers and network software services such as databases. The lack of funds for the application of blockchain technology makes it difficult to achieve full coverage of blockchain technology, which affects the promotion and application of blockchain technology.

2. Blockchain changes the inter-bank cooperation model

The use of blockchain technology to cooperate between banks refers to the blockchainization of inter-bank letters of credit, payment, and credit investigation. A typical case is China Merchants Bank China Merchants Bank blockchain direct connection cross-border payment. On February 24, 2017, China Merchants Bank announced that the bank has applied blockchain technology to the three major areas of global cash management (Global Cash Management): cross-border direct settlement, global account unified view, and cross-border fund collection. Scenes.

Wang Hui believes that the cross-border payment system applies the characteristics of blockchain decentralization. The China Merchants Bank’s cross-border payment in the case uses the Shanghai Free Trade Zone unit as an independent node, which can directly connect with overseas banks for point-to-point payment and realize real-time payment of funds. Transfer, transaction and settlement are carried out at the same time, which greatly saves the time of cross-border payment business. In addition, the agency bank and the head office conduct separate accounting on their own books, which helps to prevent confusion between the two, and also speeds up the speed of cross-border settlement, further shortening the transaction time. Secondly, unlike the traditional centralized structure, decentralized nodes reduce the risk of a single point of failure, and an attack on a certain node does not affect the operation of the entire network. In addition, the non-tamperable and non-forgeable characteristics of payment information ensure the authenticity of the information and the financial security of both parties to the transaction, thereby further improving the security of the transaction process.

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