Nov 2, 2018 06:30 UTC
Nov 2, 2018 at 07:19 UTC
HSBC Along With Standard Chartered Banks Launches Blockchain-Based Trade Finance Platform in Hong Kong
HSBC along with Standard Chartered and ten other banks have developed a blockchain-powered trade finance platform. This platform, eTrade Connect, was launched in Hong Kong.
Reuters was the first to report on this development in an article that was published yesterday. The platform is anticipated to bring efficiency to the multi-trillion-dollar financing for the international trade.
It’s a well-known fact that HSBC is the 7th largest bank in the world. The bank has reportedly stated –
“The platform, eTrade Connect, had allowed the Asia-focused British lender to reduce the time it takes to approve trade loan applications to four hours, compared with the usual one-and-a-half days.”
The system development was facilitated by the Hong Kong’s central bank, HKMA (Hong Kong Monetary Authority). The other banks who took part in the project incorporate BNP Paribas Agricultural Bank of China.
The global trade finance industry that has handled transactions over $9 trillion in 2017 is reportedly paper-based.
As indicated by the article –
“The use of blockchain technology in the banking industry is expected to reduce the risk of fraud in letters of credit (LoC) and other transactions used in trade finance, as well as cut down on the number of steps used.”
There’s no doubt that the use of blockchain is anticipated to streamline some of the processes followed in the industry which reportedly haven’t changed in the decades.
Trade Finance Platform Goes Live
HSBC indicated that among the first transactions completed on eTrade Connect was the “purchase of supplies by furniture and household goods retailer Pricerite”.
Bankee Kwan, Chairman of Pricerite, stated –
“Blockchain has transformed a cumbersome, complex process into a simpler but more secure and efficient way of conducting trade.”
The use of blockchain as well as smart contracts in trade financing won’t simply make the process more efficient, but also eradicate the risk of frauds. Platforms like eTrade Connect will bring transparency.