People's Bank of China (PBC) is reportedly considering trials of blockchain letter of credit (L/C) transactions.

This follows recent news that two of China's largest state-owned banks are looking to develop more blockchain trade finance offerings.

Digital L/Cs

Unconfirmed reports suggest PBC (China's central bank) is mulling trials of L/Cs over a blockchain platform.

The bank may also however be considering other ways to issue digital L/Cs in ways that do not require a blockchain or distributed ledger platform.

Blockchain interest

Last year PBC began issuing financial bonds on a blockchain platform to small businesses.

The central bank also said that by July 2019, it had processed 30 billion yuan (US$4.36 billion) in foreign exchange transactions using its blockchain trade finance solution.

Also last year, two of China's four major state-owned banks - China Construction Bank and Industrial and Commercial Bank of China - said they are expanding their separate trade finance blockchains internationally (DC World News, 18 December 2019).

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.