Agricultural Bank of China (ABC) has issued its first loan through a blockchain system for $300,000. One of the world’s biggest banks by assets held, by issuing the loan has completed a test of the blockchain system while taking a slice of agricultural land as a collateral. Due to the move, the government owned ABC will now join the list of 12 Chinese banks that are currently working on blockchain technology.
ABC claims the blockchain will streamline the process of granting loans while also aiding with ridding the system of double spending as borrowers would not be able to use the same collateral to obtain loans in other banks. Therefore all parties will be kept up to date with the latest information through a tamper-proof system.
WHY IS IT IMPORTANT?
1. Through using the blockchain ABC is hoping to make loans more available for farmers and businesses that use agricultural land.
2. The bank will look to take different forms of assets as collateral following the test, they would include real estate.