Hong Kong Banks To Launch A Trade Finance Platform Using Blockchain
The Hong Kong Monetary Authority (HKMA) has announced the launch of its new trade finance platform to take place before September this year. This platform would function utilising the live blockchain technology.
Hong Kong’s de facto central bank, in collaboration with seven other banks started off this task with an aim of easing the transactions across various financial institutions and also bringing transparency to the data exchanged. The seven banks that form a part of this initiative include HSBC, Standard Chartered Bank, Bank of China, Bank
of East Asia, Hang Seng Bank, Australia and New Zealand Banking Group and Singapore’s DBS Group Holdings.
Further citing HKMA, “The aims of the platform are to reduce frauds related to tradefinance and double financing, and therefore lead to increased credit availability and lowered financing costs in the long run. This may in turn help small and medium-sized enterprises (SMEs) access trade financing.”
Also, The Deputy Chief Executive of HKMA, Howard Lee, mentions in a statement with other assisting firms, “The next major milestone […] is to link up with other trade platforms in other jurisdictions to further facilitate cross-border trades.”
In a report by the Financial Times, it has been stated that the use of this trade finance platform would lead to a processing of transactions in just ‘one day’ as against ‘fourteen days’ in accordance to the current methods and techniques.
The launch does not essentially come as a surprise to the people. In early 2017, the information on the project had been revealed publically. Also, it was published that the collaboration had successfully completed a test for the upcoming platform.