Last week the China Banking Association unveiled a new blockchain solution to verify bank audit letters, developed alongside the Chinese Institute of Certified Public Accountants. More than a hundred banks and audit firms have applied to join the network.
Typically during a company audit, the auditors ask for a letter from banks to prove that a bank balance exists. One of the challenges is that paper letters from the bank can be forged.
On the face of it, this sounds like a boring back-office solution. However, the impact can be far-reaching and is a very strong use of a blockchain. For example, one of the key issues at the heart of the Wirecard collapse was allegedly the lack of bank letters supporting large bank balances, which usually would result in an audit failure.
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