As The Wall Street Journal reported on Dec. 27, COSO — an initiative to fight corporate fraud — is working on guidance on blockchain to give a better understanding of the tech for businesses that aim to integrate it into their internal processes. COSO expects to release the guidance in the first quarter of 2020.
The Committee of Sponsoring Organizations of the Treadway Commission (COSO) is planning to release guidance on blockchain for companies looking to deploy the technology.
Specifically, the guidance targets executives in financial services and businesses that use blockchain to improve their supply chains.
To improve supply chains
Paul Sobel, the chairman of COSO, said that he wants “to make sure that we’ve got that properly controlled because it is a very different view of the world when you have distributed ledgers. It isn’t something that is contained in your own system.”
COSO’s guidance is geared to help companies set up internal controls and manage enterprise-wide risks. According to Sobel, the organization hopes that its frameworks will push executives and board members to start a dialogue about what their oversight responsibilities are.
Projections on blockchain adoption
A November study by Juniper Research revealed that blockchain technology, in combination with Internet of Things sensors and trackers, will greatly reduce retailers’ costs by streamlining supply chains, while simplifying regulatory compliance, offering more efficient food recalls, and tackling fraud.
That same month, news broke that measured by patent applications in the sector, China was handily outpacing other countries including the United States in blockchain technology. At the time, the U.S., China, Japan, South Korea and Germany together submitted around 12,000 blockchain-related patent applications through 2018, with China accounting for over 60% of the five-country total.
A study by American market intelligence firm IDC projected that China’s spending on blockchain technology will exceed $2 billion in 2023.
Guangdong Blockchain Financing Platform Aims to Help Small Business
The Guangdong government launched a blockchain-based financing platform Thursday that will help small companies in the region receive loans faster from commercial banks.The government-led project is supported by Alibaba’s fintech arm Ant Financial and OneConnect, a subsidiary of one of the largest Chinese insurers, Ping An Insurance, according to a media report from Sina Finance.
The platform aims to streamline the process for commercial banks to lend funds to small businesses with more detailed and reliable profiles, including credit ratings, provided by its blockchain network.
The new platform could be the result of a government initiative launched in July to create a blockchain financing platform to connect with nearby Hong Kong and Macao to help small businesses get loans easier, according to the report.
Ant Financial announced in November plans to test its blockchain network, Ant Blockchain Open Alliance, to support startups, and OneConnect filed a $468 million initial public offering in the U.S. in the same month.
The new platform creates credit ratings for small and medium businesses based on their financial and administrative information via a blockchain network of 26 government agencies such as the State Administration for Industry and Commerce.
“Borrowing money from commercial banks for small companies has been slow and expensive”, Xiaojun He, the director of Guangdong Local Financial Regulatory Bureau, said in the report.
With the platform, small businesses will be able to use their intellectual property and export-import trading records to apply for funds from commercial banks, which is impossible under the status quo, according to the report. It can also match companies with 319 financial products depending on their financial situations.
According to the report, the platform has collected information from more than 11 million companies as well as 129 financial institutions. It has processed three transactions between local technology startups and commercial banks including the Industrial Commerce Bank of China, China Construction Bank and Ping An Bank.
