Some time ago, in the China fund Museum in Suzhou, a “129 blockchain lecture hall of Museum finance” jointly sponsored by China fund Museum and China blockchain Application Research Center was held. Yu Mingyang, director of Yixin blockchain laboratory and director of Yiqi cloud service blockchain business, was invited to attend and shared the content of blockchain exploration and wealth management. The following content comes from Mingyang’s on-site speech.
(Yu Mingyang, director of Yixin blockchain laboratory and director of Yiqi cloud service blockchain business)
1、 Current situation of blockchain application in financial field
As a financial technology enterprise, Yixin has started the research on blockchain technology industry several years ago, because we realize that blockchain technology can produce very important value in the whole supply chain finance and financial service field.
In the financial field, we divide the blockchain into three layers: the basic layer, the service layer and the application layer.
The basic layer is the core technology of the bottom layer. We mainly look at the service layer, which has been provided by several domestic enterprises, including the baas platform developed by Yixin, Tencent cloud tbaas, one account chain baas platform, ant baas platform, etc. On this platform, it can help industries to build applications, which can involve various industries.
Since 2018, blockchain has had different application scenarios in financial business. In terms of monetary field, there are clearing transactions, supply chain finance, financing, and information collection to provide risk control in the financial industry.
2、 Overview of Yixin blockchain platform
The Yixin blockchain team was established as early as 2016, and we have made some achievements in each key node. In 2017, we took the lead in deploying the blockchain application on the internal supply chain financial customer platform. This application mainly provides the customer’s whole transaction chain tracking and traceability on the steel financial transaction platform, as well as the company’s internal risk control and financial authorization. In 2018, the baas platform of Yixin blockchain was first released, and then several domestic platforms successively released similar platform services. In 2019, Yixin’s traditional supply chain financial services have been gradually carried out within the company.
Why should Yixin be a blockchain? From the perspective of finance, finance mainly serves the real economy. As the main channel of real economy financing, banks and some licensed financial institutions have many pain points:
- Information asymmetry can only rely on the historical operation data of enterprises to provide asset mortgage or guarantee at the same time.
- The life cycle of loan enterprises is short. Many enterprises, especially start-ups, can’t live for three years and can’t reach the current risk control threshold of financial institutions.
- The authenticity of financial data of loan enterprises is in doubt, and some financial data are suspected of fraud.
- The bad debt rate of loan enterprises is high, the cost of post default expediting is high, the process is long and the efficiency is low.
So how to solve this problem? Blockchain has unique advantages such as distributed storage, data can’t be tampered and forged, asymmetric encryption, intelligent contract, etc., which determines that blockchain, as a trust protocol for value transmission, is conducive to building trust and reaching consensus among many parties. As a financial technology company, Yixin is based on the blockchain platform, which helps to provide credit for enterprises and solve the pain point problems of banks and other financial institutions.
Blockworm baas, the blockworm blockchain platform of Yixin, optimizes and encapsulates six management and operation modules based on the open source architecture of the hyperledger fabric. At the same time, two smart contracts, asset issuance and asset transaction, are developed. It can help enterprises quickly create the underlying platform of blockchain, realize the rapid deployment of applications, improve the efficiency of use, reduce the threshold of use, and reduce the cost of enterprise deployment and operation and maintenance.
3、 Application mode of Yixin blockchain platform
Who should we consider in blockchain application? First of all, we are facing customers in the industry. Customers in this industry include all kinds of vertical industries, including education industry, medical industry and other industries like logistics industry and e-commerce industry. This is the customer we want to serve. So who are the sources of funds for these customers? It is a bank and a variety of licensed financial institutions.
What means do we use to connect with these institutions? We use blockchain to get through the data in these industries and institutions, and ensure the authenticity of data transmission in the institutions. This solves the problem of credit investigation. At present, we have deployed this system with customers in the culture and tourism industry and e-commerce industry.
The key to the model of credit reporting system is to set up a general account on a large industry platform by deploying the account information of customers in the process of transaction, and a sub account for each industry platform participant. Its business mainly generates fund flow with the general account, and the general account will generate transaction reconciliation with the bank.
- First, the information of each merchant on the platform can be collected through a general account platform. After the merchant information is collected, a very large amount of data will be generated.
- Second, the account operator shall communicate with the bank the conditions of credit extension and financial services. Since the operator has most of the information of the member units, it can effectively establish such a member credit mechanism. At the same time, as a representative of the industry, it can communicate with the bank, and the bank is willing to provide such credit for this large platform with guarantee and endorsement.
In this way, we solve the problem that the amount of data between small and medium-sized customers and banks is insufficient and its credit multiple is not enough.
This is the first step, and then we did the second work. We put the relevant judicial institutions and relevant impartial institutions into our chain. First of all, we are on the chain of enterprise data. Do we need a third party as a fair endorsement? We lead the fair institutions to this chain. The fair institutions play a role in the fairness of the data on our chain. We keep a copy of the fair data on the chain and submit it to the blockchain platform of some judicial institutions through hash operation.
Now the Internet courts have established some judicial blockchains. We link the data of Justice Institutions and enterprises together, so as to ensure that the data on the chain is authentic.
Then we submit the data on the chain to banks or financial institutions, banks and other financial institutions to obtain business operation data, help them to carry out risk control, effectively prevent trade fraud and over financing, and significantly reduce the risk of trade and financing business. Effectively reduce the financing difficulty and cost of small and medium-sized enterprises, and improve the financing efficiency.
At the same time, it connects with judicial blockchain, introduces judicial nodes such as certification body, justice office and court, and stores enterprise’s personnel contract and operation contract as electronic evidence on the blockchain platform. If customers encounter legal disputes, it can be used as a kind of manageable, controllable, efficient and low-cost means of judicial rights protection.
Through this complete system, we can help many small and medium-sized micro enterprises to solve the problem of financing difficult and expensive.
As we all know, Yixin has many employees and many stores across the country, so we have made an internal attempt to use blockchain technology to implement the electric signature of the labor contract of personnel, which not only improves the efficiency but also reduces the cost of personnel management.
We also found that in the financial industry, we need to do background checks for practitioners. The traditional method is to hire a third-party institution or let the respondents provide information. Considering the labor contract’s certificate storage, we use the method of electronic signature to add time stamp and electronic signature to the electronic certificate, and then put this part of data on the blockchain platform to interact with the notarial institution, which will notarize the certificate storage data uploaded by us.
In this way, other financial institutions in the future, when they need to do background checks for these employees, they can simply obtain the labor contract information provided by the financial institutions they were engaged in before from Gongzheng, so that they can provide a very fast authentication function. At present, we have applied for a patent, and we are cooperating with Shanghai Zhangjiang Gongzheng office in this regard. We also hope that our work will be recognized by more people.
Yixin has many high net worth customers, and we provide these customers with the data custody business of wealth inheritance. These high net worth people often have some concerns, for example, they will worry about the disclosure of personal assets and major transaction information, and they will worry about the personal disability in case of an accident one day. If he didn’t entrust before, there may be a big problem that many of his company’s businesses and related businesses will not be able to carry out in the future, his legacy How to distribute and inherit in the future.
Considering the needs of these high net worth people, we provide them with family trust. In fact, family trust is his significant digital assets, his personal entrustment in the case of disability and his own personal will. We can provide a very convenient online way for this service. We can provide some third-party authentication ways to help them do this. We have introduced insurance companies and courts. In the future, we can quickly help them provide such services. This service is now recognized by many high net worth people, and they think it is also a very effective means for their future risk control.
Another new attempt is a recent cooperation with vision China. It’s not clear when there are some copyright disputes, because it’s only the time for you to submit the copyright disputes to the court, which is sometimes overturned by a third party. For example, the copyright provided by the other party may have been seen in some place for a long time or in other channels. If you want to verify that the copyright belongs to you, it will be more difficult. Especially for courts and judicial arbitration institutions, they will also face greater difficulty in decision-making.
We mainly provide these customers with process copyright certificates. When you create such a work, you can store the certificates in real time in the middle link. The credibility brought by this kind of certificates is much higher than that of a single one. In addition, the use of blockchain technology has also improved the efficiency. If you do a process of certificate storage every time, you have to go to the public Zheng office once, which is impossible for everyone to accept. But on the blockchain, it can be very simple. For his creation, just click a key to link his data, and automatically add a time stamp, thus forming a complete evidence chain. In the copyright storage, you can avoid how to prove when there is a copyright dispute in the future.
4、 Future application direction exploration
4.1 asset securitization (ABS)
Now there are all kinds of negotiable securities and negotiable instruments. The central bank had such problems with the negotiable instruments before. In the process of intermediate circulation, the negotiable instruments are not monitored, which may be misappropriated by a third party and mortgaged arbitrarily, leading to risks and overdue.
With the blockchain technology, the whole bill flow process will be tracked by everyone, and the situation that the bill is overdue or misappropriated and abused will be eliminated, and it can be reflected in the supply chain finance in the future.
4.2 establishment of enterprise credit system
SMEs are an important part of social economy. However, due to the opaque capital flow of small and micro enterprises and the difficult guarantee of their business conditions, they are difficult to obtain the credit from banks and other large financial institutions, facing the difficulties of financing, financing slowly and financing expensive. In recent years, the national policy began to incline to the financial services of small and medium-sized micro enterprises.
In order to obtain credit support from financial institutions, the key is to establish their own credit. To establish enterprise credit, enterprises need to have stable cash flow data and hold assets that can be mortgaged. At present, China’s personal credit system has been gradually established. If an enterprise credit system similar to the personal credit system can be established, based on the block chain data to evaluate the payment behavior, capital flow and income status of enterprises, it can shorten the credit extension time of enterprises, simplify the financing process of enterprises, and make SMEs more convenient for financing.
We hope that the emergence of blockchain technology can establish a perfect social credit system, just like the “everyone has credit, credit has value” advocated by Tang Ning, founder and CEO of Yixin.
This article is based on the shared content of Yu Mingyang, director of Yixin blockchain laboratory and director of Yiqi cloud service blockchain business, in the “Museum finance lecture hall, issue 129 blockchain lecture hall”. The original text is first published in “Yixin monthly”. Please contact authorization for reprint.