HSBC And 10 Other Banking Giants Launch Blockchain-based Trade Finance Platform in Hong Kong
Nearly a dozen banks including giants like HSBC, NP Paribas, Standard Chartered and others have come together to launch a blockchain-based trade finance platform in Hong Kong. The new trade platform dubbed as eTrade Connect is used to boost the efficiency of funding in international trade.
As reported by Reuters, the eTrade Connect will help to reduce the time of approval for trade loan applications from the existing 36 hours to just under 4 hours. HSBC is currently the leading banking giant in the trade finance industry having clocked a revenue of $2.52 billion alone in 2017.
The overall industry figures for 2017 shows that nearly $9 trillion worth trade finance transactions took place. Over the last few decades, trade finance is heavily dependent on the traditional systems which is heavily paper-based.
The newly launched blockchain-based eTrade platform will implement a complete digital transformation of the trade documents while simultaneously automating several trade-finance processes. Furthermore, it will help to streamline the communication between all the intermediary parties involved. The most important benefit of the eTrade Connect platform will be alleviating the risk of fraud in the letter of credit (LoC) as well as other transactions in trade finance. Moreover, it will also help to cut down on steps involved in each process.
A household goods and furniture retailer - Pricerite has successfully tested and confirmed the first successful transaction taking place on the eTrade Connect platform. Pricerite chairman, Bankee Kwan, told Reuters that “blockchain has transformed a cumbersome, complex process into a simpler but more secure and efficient way of conducting trade.”
The central bank of Hong Kong, the Hong Kong Monetary Authority (HKMA) has facilitated the development of the eTrade Connect platform. In a statement, the HKMA said that the eTrade platform will collaborate with the european-based digital trading platform We.Trade. The We.Trade platform includes some of the most important banking platforms like Deutsche Bank , UBS, and HSBC.