Hong Kong banks to launch blockchain-powered trade finance platform
Seven financial institutions in Hong Kong – including HSBC and Standard Chartered – along with the territory’s central bank are to launch a trade finance platform using blockchain technology.
The consortium of banks, along with the Hong Kong Monetary Authority (HKMA), which acts as the territory’s central bank and financial regulator, will launch the platform in September. The other banks involved are BOC Hong Kong Holdings, Hang Seng Bank, Bank of East Asia, ANZ Bank and Singapore’s DBS Group Holdings.
Trade finance is traditionally one of the few areas of banking that remains paperwork-intensive, as many involved parties – including vendors, buyers, shipping companies, financiers and others – must all legally document their part of the deal before the process can move along.
Such transactions move slowly but using blockchain’s distributed ledger technology all interested parties can gain instant access to the process as documents are digitized and each process automated to help speed things along.
Howard Lee, deputy chief executive of the HKMA said in a statement: “The next major milestone is to link up with other trade platforms in other jurisdictions to further facilitate cross-border trades.”
Other trade finance projects
Indeed, HSBC is already part of the blockchain-based trade finance consortium we.trade which has already completed several cross-border trades on its platform.
We.trade was established by HSBC along with European partners Deutsche Bank, KBC, Natixis, Rabobank, Santander, Societe Generale and UniCredit.
It reported earlier this month that 10 companies, over a period of five days, had executed trades through four banks using blockchain technology to facilitate the transactions.
Roberto Mancone, chief operating officer at we.trade said at the time: “We are delighted to have launched for the first time in the world, a blockchain based platform that enhances the overall customer experience, when trading internationally.”
HSBC was also involved in an earlier trade finance project using Corda, a platform developed by New York-based blockchain developer R3.