Zheshang Bank and QuChain Technology jointly build a mobile digital bill platform. Digital bills may become the first financial direction for blockchain to be implemented

On November 11, the WeChat official account of China Zheshang Bank published an article stating that it will launch a mobile digital bill platform based on blockchain technology in January next year, providing corporate and individual customers with the functions of issuing, signing, transferring, buying, selling, and redeeming mobile digital bills on mobile clients, thereby providing customers with mobile credit settlement products, improving customer funds management efficiency and reducing usage costs.

Through the mobile digital bill platform, customers will be able to use the QR code in the mobile digital bill APP to settle mobile bills when making purchases and payments. In particular, unlike traditional paper and electronic bills, through the use of blockchain technology, mobile bills will be stored and traded in the form of digital assets, which are not easy to lose or tamper with, and have stronger security and non-repudiation. In the future, other banks can quickly access and participate in this business, and use the decentralized, trustless, and natural clearing characteristics of blockchain to clear funds in real time, eliminating the third-party credit, time cost, and capital consumption of reconciliation between different institutions, and effectively improving clearing efficiency.

Mobile Bill of Exchange Platform Business Process

Once implemented, this will become the first practical application of blockchain technology in the country to implement core banking business.

Bills have always been considered an excellent application scenario for blockchain technology. Based on the distributed, tamper-proof, and traceable characteristics of blockchain, it is possible to change the storage and transmission structure of the existing system and establish a safer "multi-center" model; "one bill sold in multiples" will eliminate bill counterfeiting; and the process from the creation to the extinction of bills can be fully reflected through timestamps. All market participants can see the flow of funds and transaction records, whether it is a large bill or a scattered small bill, whether it is a state-owned bank bill or a small and medium-sized enterprise bill, truly reflecting the entire process of bill rights transfer.

The blockchain technology platform partner of the mobile digital bill platform jointly built with Zheshang Bank is QuChain Technology. QuChain Technology was founded in 2016. Babbitt previously reported on QuChain Technology's financing event in August this year. QuChain Technology has been committed to building an independent and controllable alliance chain cloud platform. Its core technology built by the enterprise-level control platform, blockchain core modules and platform support technology is the first competitiveness of QuChain Technology.

Based on the self-built alliance chain underlying cloud platform, QuChain Technology adopts the RBFT consensus algorithm, designs an SVP-based access mechanism, improves virtual machine performance and many other core technologies. According to the needs and characteristics of banks, it has made customized in-depth optimization and transformation, and jointly completed the construction of a blockchain-based mobile digital bill platform with China Zheshang Bank.

Talking about this cooperation, Li Wei, CEO of QuChain Technology, said with a smile, "This is actually a natural thing." The bank itself already has plans to build a mobile digital bill platform. Through technical exchanges, the two sides found that the use of blockchain can make this system better:

"In the past, bills of exchange were basically limited to the scope of the bank itself. However, with the use of blockchain, all banks can exchange bills, expand the circulation scope of bills of exchange and improve liquidity. At the same time, various links such as clearing can also be made more efficient. On the one hand, it is convenient for individuals to use, and on the other hand, the entire market scale will also expand."

In September this year, the central bank issued the "Notice on Regulating and Promoting the Development of Electronic Commercial Bills" (Yinfa [2016] No. 224), vigorously promoting electronic commercial bills (electronic bills). In the "Notice", the central bank requires that from January 1, 2017, all commercial bills with a single bill amount of more than 3 million yuan should be processed through electronic bills; from January 1, 2018, in principle, all commercial bills with a single bill amount of more than 1 million yuan should be processed through electronic bills.

Xu Zhong, inspector of the Financial Market Department of the Central Bank, and Yao Qian, deputy director of the Science and Technology Department and head of the Digital Currency Research Institute Preparatory Group, recently published a joint article proposing that building digital bills with the help of blockchain is essentially a way to replace the existing construction of electronic bills and realize point-to-point transmission of value. If digital currency can be used in the alliance chain, direct clearing on the chain can be achieved, and participants can complete payment operations by sending central bank digital currency to counterparties.

Li Wei also admitted that the current bill of exchange system is just a beginning. In the future, it can be expanded to various financial assets such as commercial bills through bills of exchange. At the same time, it can be connected not only with banks, but also with insurance companies, securities companies, etc. to jointly form a value transmission network, and the scale effect will become more apparent.

However, it is of great significance as a breakthrough point for the existing bill of exchange system.

“One point is used as a breakthrough point, which carries the function of value transmission. Each point carries out value exchange and circulation. After the entire network effect comes out, the cost will be greatly reduced.”

Li Wei revealed that the cooperation with Zheshang Bank will continue to deepen to help the bank realize its industrial layout. Zheshang Bank also said that in the future, on the one hand, it will work with peers to enrich the application of mobile digital bills; on the other hand, relying on the "Easy Enterprise Bank" platform of Zheshang Bank, it will use blockchain to form a mutual trust mechanism between different core enterprises. The corporate credit between various financial circles can be circulated, circulated and exchanged on this platform, aggregating multiple single ecosystems into an equal, multi-center, real-time clearing corporate credit ecosystem and corporate credit trading system.

The mobile digital bill of exchange platform based on blockchain technology provides a richer imagination space for bills of exchange and other applications, and provides a solid foundation for the subsequent in-depth development and application of blockchain-based core financial businesses.