Chinese e-commerce leader JD.com announced that it’s subsidiary, JD Finance, is planning to issue asset-backed securities (ABSs) on a blockchain.
A report from Securities Times, an outlet of the China Securities Regulatory Commission, says that the trial was established by JD Finance in a partnership with Huatai Securities, which will underwrite the issuance of securities, and Xingye Bank which will act as a trust.
JD Finance aims to issue the securities via a consortium blockchain. This blockchain will see each party acting as a node, recording each transaction in a transparent manner. This experiment further tries to find out if the blockchain can sufficiently meet the demands of the various parties involved in the asset securitization process, be they the issuers, underwriters or the buyers.
JD Financial first broke into financial services in 2015 with the release of its first traditional product, as well as an online service that aims to help companies raise capital through their issuance. These usually come in the form of a portfolio of loans or credit card debts, which can be further traded on the secondary market.
According to local news, JD Finance issued an automobile loan last August 2017 using a blockchain platform, marking it as the firm’s first foray into the integration of distributed ledger technology in its financial services.
Last April, JD.com also revealed last April that it will launch a blockchain-as-a-service (BaaS) platform this 2018, in line with other tech titans such as Huawei, Oracle, IBM and Microsoft.