Lufax Exploring the Future of P2P Lending Using Blockchain

Lufax is among the biggest online wealth management platforms in China. The company has announced that it has plans to work on its current P2P lending system, which is now valued in the tens of billions of dollars, by embedding blockchain technology.


As regulations seem to be lacking in the industry, the unalterable structure of how data and records are stored within a distributed ledger system will allow major entities in the field to better their transparency and decrease their costs, according to Greg Gibb, the CEO and chairman at Lufax.

Gibb revealed that he anticipates a lot of the emerging platforms from the P2P scope to fail, hundreds from the 1,500 currently in operation.

The Problem with Transparency

He noted that the main issue with P2P lending, which is done on an international scale and not just in China, is the lack of transparency. So, he said that if every contract term between the borrower and the lender is stored on a blockchain decentralized ledger, then this issue will no longer exist.

Gibb also stated that if there will be any update in the terms of the contracts, such changes will be transparent as well and can be viewed by all entities involved, which includes the regulars, Tx parties, and curators. Furthermore, Ping An Insurance has plans to implement blockchain tech in order to authenticate qualifications and documentation for Chinese investors.  

Any regulations that govern the managing of assets define what is meant by an investor who is "qualified" as in investors with net assets amounting to 3 million yuan or $432,950, and gross assets of 5 million yuan.

It seems Lufax will also use blockchain technology to maintain any updated data and documentation that belongs to the client, like statements from banks and anything proving income, within the ledger.

The idea would be like an electronic passport, trusted information that wouldn’t need validation from banks in order to ensure an investor is qualified.

Lufax has been planning an ICO in Hong Kong since April, which could put the company at a value of $60 billion. Lufax is waiting for the correct time to go through with the listing, according to the CEO.

He further stated that the market for fintech is constantly evolving and the days when the market would just value a certain firm at ten times revenue are long since over.

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