Explore The Response And Management Of Blockchain Technology Impact Commercial Banks

Payment clearing is one of the most fundamental functions of the banking industry.Letter of credit is a common method of payment in international trade and an important income source of the intermediary business in commercial banks.It primarily bears the impact of the application of blockchain technology.Blockchain technology exerts significant influences over the payment system and functions of the banking industry.On the one hand,by applying blockchain technology,the banking industry can achieve higher payment efficiency and reduce costs effectively;on the other hand,the banking industry needs to make significant adjustments to the existing system,the related spectrum of change being broad and the vertical structure of change being profound.In this paper,we will begin with an introductory section offering an overview of the current situation of the development of letter of credit.Empirical evidence will also be provided to trace the origin and the development,as well as key features,settlement processes,and the advantages and disadvantages of settlements by letter of credit.We will then compare the applying processes between traditional paper documentary letter of credit,electronic letter of credit and blockchain-based letter of credit,study the evolution of letter of credit propelled by new technologies,and foresee the development of blockchain-based letter of credit.Lastly,we will consider HZ Rural Commercial Bank as an example and provide a SWOT analysis,discuss the challenges and opportunities that commercial banks face during the introduction of blockchain technology.In our concluding section,we will also provide commercial banks with theoretical and operational advices on how to adapt to the changes in payment and settlement methods brought about by new technologies.