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World's Largest Bank Eyes Faster Asset Exchange With Blockchain

The Industrial and Commercial Bank of China (ICBC), one of China’s “Big Four” state-owned commercial banks and one of the world’s largest by total assets, is seeking to patent a blockchain system for the exchange of financial assets.

According to a patent application filed by the bank in January and revealed on Friday, the system envisions a platform whereby participating institutions can function as nodes to form a distributed network.

When a user from one institution initiates a transaction request, it triggers a smart contract causing every node to validate the transaction based on the information provided, including the sender’s account balance, name and transaction amount. A transaction would be considered complete once the network has received sufficient validations from participating nodes for consensus above a pre-determined threshold.

The goal of the concept, based on the document, is to eliminate intermediaries in the existing system and improve the liquidity of financial assets.

The ICBC said in the filing that the exploration arose since the existing system is slow and costly when sending interbank or cross-border transactions for both ordinary payments and financial instruments, such as precious metals and futures products.

The document states:

“The traditional transaction chain that is built around a centralized credibility system incurs problems like the high cost, low efficiency, low stability, as well as inflexibility. This impedes the bank’s launch-to-market process to meet the rapidly growing demand for innovative financial products.”

The patent application marks the bank’s latest filing related to blockchain technology, according to the China State Intellectual Property Office. As previously reported by CoinDesk, the bank is also seeking to patent a blockchain system that can verify user information over a distributed network.

According to a news report from the South China Morning Post, ICBC took over Well Fargo to become the largest bank in the world by total assets as of January 2017. The institution held 24.9 trillion yuan ($3.6 trillion) in assets as of the end of 2017, as per its latest financial report.

See the full patent application below:

ICBC patent by CoinDesk on Scribd

ICBC image via Adrian Grycuk/Wikimedia Commons

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ICBC's First Blockchain Patent Is Now Public

The Industrial and Commercial Bank of China (ICBC), one of the country’s four largest state-owned commercial banks, is exploring a way to authenticate digital certificates and store data in a sharable blockchain.

According a patent application filed with China’s State Intellectual Property Office (SIPO), the bank aims to use a blockchain system to improve the efficiency of certificate issuance and save users from repetitively filing the same document to multiple entities.

The technology, based on the patent, touts a system where a certificate issuer will first match a user’s credential with a particular certificate digitally. After it’s approved, the data will be encrypted and moved onto a blockchain which will update the distributed ledger held by different entities that could potential require this certificate.

By further decrypting the data with users’ specific credentials, the system will allow entities to view an authenticated document digitally to streamline its operation flow.

The patent, currently the first blockchain-related one filed by the bank with the SIPO, was first submitted in November 2017 and released on Friday.

It explained that the technological exploration stems from the current pain point where consumers are constantly being required to submit the same certificate – such as for birth, marriage or eduction – by different entities they are dealing with.

“Traditionally users have to obtain a certificate from an authority that issues it, which does that manually. And then they present it to entities that require the certificate. This process is inefficient and poses the counterfeit issue,” the bank wrote in the document.

The patent application marks another effort taken by a Chinese state-owned commercial bank to utilize blockchain technology in data storage and sharing.

Recently, Bank of China has also detailed in a patent application its move to develop a technology that it claims to be better able to enhance blockchain’s data storage and process capacity.

See the full patent application below:

ICBC image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.