After many years of harsh opposition to blockchain technology, the floodgates in China appear to have finally opened. In May it was announced that yet another Chinese province would begin moving toward the creation of a pilot program for cross-border payments using blockchain technology.
Hainan Province appealed to China's central government to approve an initiative which would allow lending to export companies. The government agreed to allow the pilot program. If successful, the program would greatly reduce the amount of red tape involved with exporting goods. It would also streamline loan applications.
Two banks will be used to test the new blockchain program. Success in the pilot phase would open the door for more financial institutions to participate.
The Bank of China was the first institution chosen to try out the process. It used the blockchain platform to move funds from a company that is located in Hainan province.
The advantages of the program are numerous. Transactions done with the program are less subject to error. They are also more secure, offering a natural resistance to tampering. Efficiency and processing times for financial transactions are also expected to improve as a result of this blockchain platform.
Other areas such as Hunan province have also taken steps to embrace blockchain technology. This is significant when one considers that the Chinese government had previously taken steps to virtually eliminate the use of Bitcoin and other cryptocurrencies within its borders. The country now seems ready to accept the realities of blockchain development.
When countries like China begin to ease restrictions on the use of cryptocurrencies, the entire market stands to benefit. The news coming out of China joins other positive indicators like the upcoming Bitcoin halving. These things should have a positive affect on the market, perhaps sending Bitcoin into a long-awaited bull resurgence.