Seven banks including Hong Kong’s banking regulator are to launch a trade finance platform this September using blockchain.
The platform is reported to be one of the largest government-led cross-bank cooperation globally. It will include UK banking giant HSBC and Standard Chartered PLC. HSBC is the seventh largest bank globally by assets and the largest in Europe; Standard Chartered is a London-based bank with businesses across Asia.
Other banks involved are said to be one of Australia’s big four, ANZ, and four Asian banks, BOC Hong Kong Holdings, Hang Seng Bank, Bank of East Asia Ltd and Singapore’s DBS Holdings Ltd.
The financial sector has been increasingly under the microscope both by private companies and government bodies, who are beginning to regard blockchain technology as a way of modernizing record keeping and speeding up payments, in what is often described as an overly paper-driven industry, particularly given the technologies available in 2018.
The cross-bank project has been proposed to alleviate exactly some of these institutional operating issues, as Howard Lee deputy chief executive of the Hong Kong Monetary Authority (HKMA) explained. The main focus will be the digitalization of documentation and automating processes. Lee added that the group will want to “link up with other trade platforms in other jurisdictions to further facilitate cross-border trades”.
It appears that banks, at one time shunning blockchain due to in part to its connection with Bitcoin and Ethereum, are coming around to seeing the advantages of integrating the technology into upgrading financial systems.
The multi-bank platform will not be the first official blockchain encounter for HSBC. Along with Dutch giant ING, the two banks are reported to have made the world’s first trade finance transaction using blockchain earlier in May.
In China, The Shanghai Stock Exchange (SSE) published a research paper on Tuesday, which analyzed the use of DLT in various stages of a security transaction. The SSE is one of the two stock exchanges operating independently in the People’s Republic of China and is the world’s third-largest stock market by market capitalization.
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