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JD Finance, a subsidiary of Chinese e-commerce giant JD.com, has made public its plans to issue asset-backed securities (ABSs) on the blockchain, as reported by local media on June 13.
JD Finance will issue the ABS in combination with Huatai Securities and Xingye Bank according to China’s Securities Regulatory Commission (CSRC) via its media outlet Securities Times.
The trial is important so as to determine if the blockchain can meet the burden of demands of the range of parties involved in the asset securitization process, such as underwriters, issuers, and buyers. According to JD Finance head Hao Yanshan, the partners will evaluate blockchain’s potential to enhance asset security.
“…The alliance chain must meet the actual needs of all participants in the asset securitization business in order to fully reflect the application value of blockchain technology,” he explained.
However, this is not JD.com’s first move in the blockchain arena; in March, JD.com also declared plans to launch a Blockchain-as-a-Service (BaaS) platform and expressed interest in using the technology to track meat supply.
The financial services firm of JD.com also first launched its traditional, non-blockchain ABS product in 2015, as well as an online service that helps other companies to raise capital via their issuance. This normally takes the form of a collection of loans or credit card debts that investors can trade on the secondary market.