Kingsoft Cloud, the majority-owned cloud services division of Hong Kong-listed Chinese software company Kingsoft, hopes its newly launched blockchain business will become part of the ecosystem around the Chinese central bank’s digital currency.
The People’s Bank of China started research on digital currencies as early as 2014, and last year said it was ready to launch its own digital sovereign currency. KingSoft Cloud, which applied to the US Securities and Exchange Commission for a potential initial public offering and listing in December, started its blockchain-backed supply chain financing services in China last year and provides advisory and other services to small to medium enterprises and their financial intermediaries.
In supply chain finance, suppliers sell their invoices or receivables at a discount to banks or other financial service providers in return for faster access to the money they are owed, instead of the usual credit terms of 30 days’ time. Supply chain finance provides short-term credit that optimises working capital for the buyer and the seller.
“For the traditional core enterprises, as their products are directly bought by the end customers, they are able to get cheaper financing from banks. But behind them, there are multiple tiers of their suppliers, which have traditionally been suffering from high cost of financing from banks,” said Zhu Jiang, the Beijing-based blockchain department general manager at Kingsoft Cloud.