The Industrial and Commercial Bank of China (ICBC), which is among the world’s largest banks in terms of overall assets, plans to patent a blockchain-based system.
The service for trading financial assets is described in a patent application filed in the beginning of this year. The participating institutions may operate as nodes to form a distributed network through the platform.
Why it is important
- Representatives of ICBC believe that the current payment system is not as fast and is expensive. By introducing the blockchain system, the bank eliminates intermediaries and increases the liquidity of financial assets.
- Centralized systems don’t permit banks to meet the fast growing demand for innovative financial products. The use of distributed ledger technology helps financial institutions to adapt to new market conditions.
_How the system will work:_
One of the organizations creates a request for a transaction - It prompts a smart contract - It makes each node check the transaction based on the information provided (balance of the sending party, name and amount of the transaction) - The transaction is set to be complete when the network receives a valid confirmation from the participating nodes.
The current initiative is not the first or last for ICBC in the sphere of blockchain. The bank also thinks of patenting a technology-based system, which will be able to verify user information in a distributed network.
By Ekaterina Ulyanova