Following Circle, China's Baidu has started investing in US fintech company Zest

Rage Comment : After the Chinese search engine giant invested in the US blockchain company Circle, it has once again set its sights on the US financial technology startup Zest in less than a month. This investment is to replace the damaged traditional credit system in the Chinese market and build a credit assessment platform based on search data. Currently, there are 500 million people in China who have no credit history. I believe this is a huge development market. China provides great potential for the development of Zest because China does not have a centralized credit bureau like the United States. I believe it is only a matter of time before China accepts Bitcoin.

Translation: Nicole

Chinese search engine Baidu is slowly preparing to resume its strategy, which means that China will accept Bitcoin again sooner or later.

As Baidu's interest in financial technology continues to rise, this interest is carried out in a cross-cutting manner, and the Asian giant and the advanced global market of the United States are once again connected through investment. This is the second time Baidu has invested in a US financial technology company in a month.

Baidu recently invested in Circle Internet Finance Ltd., a US blockchain company, after the bitcoin startup announced that it had raised $60 million in funding from a consortium led by IDG (a US media, data, market services and venture capital organization).

This time, Baidu invested an undisclosed amount in Zest, one of the fastest-growing financial technology startups in the United States, with the aim of developing a credit assessment platform based on search data to remedy the damaged traditional credit system in the Chinese market.

China’s market of 500 million people

The technology platform that applies Google-like mathematics to credit assessment decisions was discovered by Douglas Merrill, Google's former chief information officer.

Zest lends loans to responsible borrowers with high credit scores through its platform. Zest's entry into China can enable users who have sufficient credit scores but are not proven to have banking services to get better banking services in today's economic era.

Zest writes on its website that 500 million Chinese users have no credit history. This lack of data makes it difficult to assess credit risk, but its platform can convert shopping data into credit data and create credit history from scratch.

The U.S. company will use its platform, which can absorb large amounts of data, to verify borrowers with good credit scores, allowing lenders to get higher repayment rates and consumers to pay lower credit costs.

This will rely on several mathematical models that will allow accurate decisions to be made in less than 10 seconds without human intervention in the underwriting process, unlike other creditors who may take hours or days to make a decision.

Bitcoin has not been accepted since 2013

China offers great potential for Zest’s growth because it does not have centralized credit bureaus like the United States.

Baidu stopped accepting Bitcoin in 2013 after the country’s central bank banned financial institutions from processing transactions, causing the price of the virtual currency to fall.

However, these moves, combined with market reports and the Chinese government’s friendly stance on Bitcoin-related matters, including allowing large-scale mining activities in China, have high hopes for the recovery strategy of China’s largest search engine. It is only a matter of time before China accepts Bitcoin, and I believe the results will not disappoint.