Banks Partner to Launch Blockchain Finance Platform
November 3, 2018 1:30 pm
The Standard Chartered Bank, HSBC and ten other banks have partnered to launch blockchain trading finance platform in Hong Kong. The partnership aims to boost efficiency in the multi-trillion-dollar funding of international trade.
The new platform is called eTrade Connect, and it aims to improve the efficiency of international trade. The eTrade Connect will be used to decrease the time required to approve trade loan applications from thirty-six to just four hours. According to the report, HSBC has earned $2.52 billion in trade-finance revenue in 2017. This growth has made HSBC one of the global banking leaders in the industry.
In 2017, trade finance transactions were worth more than $9 trillion. The industry has remained heavily reliant on legacy systems and cumbersome paper-based systems.
According to the announcement, the eTrade Connect platform will be used to digitize and automate documents and trade finance processes. It can also streamline the interaction between counter-parties. The use of blockchain technology as eTrade Connect is expected to reduce the risks of fraud in the letter of credits (LoCs) and other documents.
Other banks who will be participating in the development of the platform are Hong Kong’s de facto central bank, the Hong Kong Monetary Authority, Agricultural Bank of China and BNP Paribas.
On Wednesday, HSBC announced that the first transaction created, exchanged and confirmed on eTrade Connect using the furniture and household goods retailer Pricerite.
Bankee Kwan, Chairman at Pricerite, said:
“Blockchain has transformed a cumbersome, complex process into a simpler but more secure and efficient way of conducting trade.”
The announcement also included that the eTrade Connect platform will collaborate with We.Trade, a European-based digital trading platform, and Deutsche Bank. The partnership will be using similar technology.