The Agricultural Bank of China (ABC), one of the “Big Four” banks in the People’s Republic of China, has used blockchain technology for the issuance of a loan worth 2 million yuan (approximately $300,000), CoinDesk reported referring to a local news source.

The trial involved issuing a loan backed by agricultural land as collateral. It was conducted by the bank in one of its branches in China's Guizhou province.

In order to facilitate the loan issuance, the blockchain system is deployed among various nodes, which includes other commercial banks, the provincial branch of the People's Bank of China (PBoC), and the local government's Land and Resources Bureau, the bank said. The initiative is part of ABC’s efforts to improve access to loans for farmers and businesses.

ABC said that blockchain technology can help streamline the process of approving loans by keeping all involved parties updated with the data of the borrowers and their collateral on a distributed ledger. In addition, the technology can also remove the problem of double spending – using the same piece of agricultural land as collateral for applying for loans from different banks.

The bank intends to expand the application to issue loans backed by other types of assets in the future.

ABC has also unveiled its three-year action plan for fintech innovation. The action plan has proposed building a platform to enhance six basic capabilities in financial technology such as “artificial intelligence, mobile internet, blockchain, big data, cloud computing, and information security.”