Hong Kong Monetary Authority To Launch Blockchain-based Trade Finance

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Hong Kong's de facto central bank is set to launch a blockchain-backed trade finance platform that will link with 21 banks, the Financial Times reported.

The Hong Kong Monetary Authority's blockchain platform was designed by OneConnect, a subsidiary of China's financial services group, Ping An.

The banks participating in the network include HSBC and Standard Chartered.

The blockchain platform would be one of the first and largest examples of a government-led project in the $9 billion global trade finance, the FT said. This would also be one of the earliest to go live.

Private players have already trialed the blockchain in trade finance and showed that the distributed ledger technology underlying the cryptocurrency Bitcoin, helps to reduce time and paperwork in transactions.

In May, HSBC and ING Bank successfully conducted the world's first live trade-finance transaction using a blockchain for their mutual client, the American food and agricultural giant Cargill.

The two banks carried out the end-to-end trade transaction on the New York-based start-up R3's scalable blockchain platform called Corda.

The exchange was done in 24 hours, in contrast to conventional exchanges of paper-based documentation related to letters of credit that usually take between 5 and 10 days.

Early this month, we.trade, a Dublin-based joint venture established by a consortium of nine European banks, said it successfully completed the first real-time commercial cross-border trades on its blockchain platform.

There were seven trade transactions completed through four banks by ten companies on the platform involving five countries.

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