The bank reported that it completed the world’s first trade finance deal using blockchain.
In a statement, HSBC claimed that it conducted a transaction with ING Bank NV on behalf of Cargill Inc., a US food and agricultural group. The bank used Corda blockchain technology to finance a shipment of soybeans from Argentina to Malaysia, HSBC tweeted:
HSBC & ING Bank have used Corda blockchain technology to finance a shipment of soya beans from Argentina to Malaysia for food & agriculture conglomerate Cargill. Revolutionising the future of Documentary Trade. #TransformingTrade pic.twitter.com/MOBA1gQYIl
— HSBC (@HSBC) May 13, 2018
The use of blockchain technology in the banking industry should help streamline the usually paper-intensive process in trade finance, reducing the risk of errors and fraud in letters of credit and other transactions.
“This is an inflection point for how trade is conducted. With blockchain, the need for paper reconciliation is removed because all parties are linked on the platform and updates are instantaneous,” - Vivek Ramachandran, HSBC’s global head of innovation and growth for commercial banking, said in the statement.
Citing a study by the United Nations, HSBC claimed that putting all trade-related paperwork in the Asia-Pacific region into electronic form could slash the time it takes to export goods by up to 44 percent and cut costs by up to 31 percent.
By Ekaterina Ulyanova