Bank of China leverages blockchain technology to issue $2.8 billion worth financial bonds for small companies

• The Bank has issued almost 404 billion yuan to 410,000 small and micro-enterprise customers since September.
• China’s central bank is also expecting to launch its own digital token soon.

The Bank of China has recently issued a fund of 20 billion yuan ($2.8 billion) for blockchain-based special financial bonds. Sina Finance, a local news outlet, earlier reported that the funds will be used to issue loans to small and micro-sized companies.

Since late September, the Bank of China has issued almost 404 billion yuan ($57.7 billion) to 410,000 small and micro-enterprise customers. The numbers represent an increase of 35% since 2018. Generally, micro-enterprises have less than 10 employees, while small companies have up to 50 employees.

This piece of news comes after the Chinese government deemed the digital economy as very important. Earlier in December, Forkast Insights, the research arm of Asia-based Forkast, speculated how blockchain technology is integrated in China. The report suggests that blockchain technology is gradually expanding in the country and has a slew of “real-world, practical use cases that are far beyond the experimental stage.” 

According to a Cointelegraph report in November, the advancement of blockchain in the country will witness a compound annual growth rate of 65.7% from 2018 to 2023. The report also stated that the technology will surpass $2 billion by the end of 2023.

In the meantime, the People’s Bank of China, China’s central bank is expecting to launch its own digital token to challenge the US dollar. The first real-world test of its central bank digital currency will be held soon by the bank. It will first take place in the city of Shenzhen before the end of 2019, and could also include the city of Suzhou. Major banks and economic participants like China Telecom will likely test digital currency payments.