The private blockchain consortium led by blockchain technology startup R3 has added its newest member in China Merchants Bank, a Chinese banking giant.
Guangdong-based China Merchants Bank (CMB), the first commercial bank wholly owned by corporate legal entities in China is now the second Chinese member to join the R3-led banking blockchain consortium. As of March 2016, CMB showed total assets of $838.28 billion and is among the top 10 banks in China and the top 30 banks globally, by assets.
Elaborating on CMB’s new endeavor with R3, general manager of CMB’s IT department Tianhong Zhou stated:
As a technologically advanced bank, China Merchants Bank has always actively explored new technologies and applied them in our businesses. Blockchain holds great potential for the banking industry, and we look forward to working with R3 to deliver the innovation required to improve a range of financial services and processes.
The Chinese bank will hope to develop commercial applications of blockchain technology in the banking sector, specifically for the Chinese market. It will do so by collaborating with 60 of the world’s biggest banks and financial institutions at the R3 Lab and Research Centre which has already developed the likes of Corda, the private distributed ledger software platform.
R3 CEO David Rutter commented on R3’s “footprint” in mainland China while welcoming CMB to the swelling ranks of its consortium.
“The power of this technology lies in its potential to join institutions across borders and create an efficient and effective infrastructure that is appropriate for today’s increasingly globalized financial markets,” Rutter stated. He further added that R3 will be growing its network in China in coming months, hinting at future Chinese members.
The first Chinese member to join R3 was the Ping An Financial Services Group, in May 2016. The financial services group is the largest non-state-owned financial entity in China and the country’s second largest insurer.
Until early 2016, the R3 consortium was notable for its lack of participants from outside the traditionally “developed” countries. When R3 closed its first round of member admissions in December 2016, there were no Latin American nor Chinese financial institutions at a time when European, North American and East Asian banks were all among the pack.
It is perhaps even more pronounced when the R3 banking blockchain consortium – arguably the highest-profile global private blockchain entity focusing exclusively on banks and the financial industry – showed a glaring lack of Chinese members while the Asian nation occupies the top four slots in the list of the world’s biggest banks. China is also by far and away the country with the most number of banks in the top 50, globally.
However, 2016 has seen R3’s first Latin American member, its first Chinese member as well as – most recently – its first African member, join the ranks. Other notable recent members include global insurance giant MetLife and publishing house Thomson Reuters.
Images from Shutterstock and R3.