Bank of China Inks Deal with UnionPay For Blockchain-Powered Payment System

State-backed Bank of China (BOC) has signed a deal with financial services corporation China UnionPay (CUP) to jointly develop a blockchain-enabled payment system, according to a recent announcement.

According to BOC, the deal is in response to the growing demand for and regulatory requirements on blockchain applications in the real economy, and is designed to provide more extensive opportunities for cooperation between enterprises, particularly in cross-border digital payments.

“According to the agreement, the two parties will continue to take advantage of their respective fields, actively implement the requirements of mobile payment convenience demonstration projects, deepen all-round cooperation in the field of mobile payment, promote the healthy and rapid development of the payment industry, and provide intelligent, open, integrated and characteristic digital mobile finance for customers,” the BOC said.

Both the BOC and the CUP also committed to jointly explore big data and distributed ledger technology deployment to improve digital banking products further.

The bank added it had maintained an excellent cooperative relationship with CUP with both sides achieving excellent results working together over recent years in cross-border business, product innovation, bank card issuance and receipt.

Only recently, the two financial institutions jointly unveiled a series of unique mobile payment products such as QR code payment, Apple Pay, and a cloud flash payment app to continue optimizing and improving customer experience with the aim of maintaining their market leadership.

“In the future, Bank of China and China UnionPay will adhere to the development concept of ‘cooperation, openness and win-win,’ continue to deepen cooperation, adhere to the practice of inclusive finance, and jointly provide customers with a safer, more convenient and more efficient mobile payment service experience,” the announcement added.

Early this month, the Chinese Ministry of Industry and Information Technology (MIIT)  announced it was discussing with various stakeholders on how to encourage more companies to adopt blockchain technology for commercial use.

The MIIT has put forward several suggestions how blockchain technology could be adopted in the mainstream as well as issuing a clarification that the ecosystem is a priority in the ministry's initiatives.

The ministry aims to expand blockchain applications gradually from the financial sector to other major industries such as supply chain management, Internet of Things (IoT), and electronic deposit services.