Zheshang Bank, one of the largest privately held commercial banks in China, has used its proprietary blockchain platform for issuing of $66 million securities to investors. The bank completed the issuance on Aug. 17, becoming one of the first institutions in the country to have made such an issuance over a blockchain network.
A few days earlier, on Aug. 13, the bank filed a prospectus with the Shanghai Clearing House planing to issue securities worth 400 million yuan, or $66 million, that are backed by a portfolio of account receivables from various corporations.
The platform, dubbed Lianrong, was created by the bank to allow registered companies to broadcast account receivable assets to potential investors and to further let them settle invoice transactions as securities peer-to-peer.
By purchasing a firm’s account receivables, an investor essentially pays for the firm’s pending invoice at a discount and expects to later collect the full amount from the party liable for making the original payment.
Founded in 2004, Zheshang Bank is one of 12 publicly traded commercial banks in China that have launched various blockchain initiatives over the past year.
As a reminder, JD Finance, a subsidiary of Chinese e-commerce giant JD.com, has also turned to blockchain to specifically offer asset-backed securities. In June, the company plans to launch a similar product via a distributed network in partnership with another commercial bank.