JD Finance to offer Asset Based Securities on Blockchain
JingDong's security take on blockchain after parent company's trend
A subsidiary of a Chinese e-commerce provider is set to roll out an Asset Based Securities (ABS) on the blockchain. JingDong (JD)) finance, an auxiliary of the Chinese JD.com, is rolling out a plan to tap from blockchain. The company wishes to adapt blockchain to its operations after a successful automobile loan offer through blockchain in August 2017.
This is according to a release by Securities Times, a mouth piece for China Securities Regulatory Commission (CSRC). JD conducted a test on the project in partnership with Huatai securities. The partner is a brokerage firm that will underwrite issuance for the project. Also partnering with JD is Xingye bank. The bank will act as a trust.
The coming together of the three firms will enable them test a so called ‘consortium blockchain’. Through it, all the participating parties will act as nodes and verify all the information being entered on the blockchain. This is an endeavor to test blockchain’s adaptability to demand. Will it be able to accommodate multiple services complementarily at ago? It will also test blockchain’s ability to assure asset securitization for underwriters, buyers and issuers working together at the same time. They believe that blockchain will aid in reducing risks associated with assets issuance.
Other JD blockchain ventures
This will be the first time they will issue ABS on the blockchain and second project on it since the automobile loan. Previously in 2015, they issued a regular Asset Based Securities alongside an online service. Through the service, firms were able to raise capital. The service further traded on secondary markets in form of loan portfolio and debit cards.
The parent company JD.com has been making big strides in blockchain adoption. To propel it forward much faster, the company launched a blockchain accelerator program to help blockchain start ups in scaling up operations. It also has a blockchain based beef tracking system for imports from Australia.
In April, JD confirmed that it shall be joining efforts with other leading firms in the blockchain race. To that end, they will develop a blockchain-as-a-service platform in collaboration with IBM, Microsoft, Huawei and Oracle. Other notable companies making big leaps with the technology in the Chinese nation are Tencent and baidu.