ICBC Patents Blockchain-Based Exchange of Financial Assets, Verifying User Information

Like other giant companies, the Industrial and Commercial Bank of China (ICBC) also wants to use blockchain to streamline operations.

ICBC building

It was in January 2017 when the South China Morning Post reported that the Industrial and Commercial Bank of China (ICBC) — one of China’s “Big Four” state-owned commercial banks — took over Well Fargo to become the largest bank in the world by total assets. At the end of 2017, the institution held 24.9 trillion yuan ($3.6 trillion); so if they have some plan related to blockchain, we want to know about it.

And guess what, we have caught two blockchain-related patents from ICBC. Let’s see what they are all about, shall we?

A blockchain system for the exchange of financial assets

ICBC has reportedly filed for this patent in January of this year, envisioning a platform in which participating institutions would function as nodes to form a distributed network.

When a user from one institution initiates a transaction request, the system would start a smart contract whereby every node would validate the transaction based on the information provided — including the sender’s account balance, name and transaction amount. Once the network has received sufficient validations from participating nodes, the transaction would be considered complete.

Like that is the case with many blockchain solutions, this one also aims to kick the middleman out of equation, as well as to improve the liquidity of financial assets.

In the filing, the ICBC says this kind of a decentralized system would solve current inefficiencies that arise when sending interbank or cross-border transactions for both ordinary payments and financial instruments, such as precious metals and futures products.

From the filing document:

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.

And there’s also another decentralized computing patent by the ICBC.

Verifying user information over a distributed network.

The other ICBC patent is exploring a way to authenticate digital certificates and store data in a sharable blockchain.

The system aims to improve the efficiency of certificate issuance and save users from repetitively filing the same document to multiple entities. The process would start by first matching a user’s credential with a particular certificate digitally, and after it’s approved — the data would be encrypted and moved onto a blockchain from where other entities could access/check it when needed. These other, previously defined and approved entities, would be able to decrypt the data with users’ specific credentials to view an authenticated document to streamline their operations flow.

From the patent application with China’s State Intellectual Property Office (SIPO):

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.

In other words, ICBC envisions the system that works in a similar fashion to Facebook or Google login, but in the business/finance setup. Instead of requiring users to submit the same information and certificate(s) over and over, users would have to do it once and when needed — share that information with other parties. Sounds simple, but is it?

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