China’s central bank has created a system to transfer paper checks to Blockchain. It took one year to develop the system, and in 2017 a prototype was successfully tested in a virtual environment. Paper business checks in China function like money orders, except that recipients can also exchange them with other entities
A large number of middlemen needed for issuing a check and the fraud risks following it were the problem of traditional banks. China’s financial integrity could be undermined by fake checks circulating among commercial banks.
Basically, the new system allows to tokenize checks and control transactions via smart contracts. From now regulators can track the entire life cycle of a digitized check.