HSBC and Dutch Bank Performs First Trade Finance Transaction Using Blockchain

HSBC and Dutch Bank Performs First Trade Finance Transaction Using Blockchain

Blockchain News
May 14, 2018 by Sandra Onyeiwu
1503
HSBC and Dutch bank ING successfully completed the world’s first trade finance transaction using a single blockchain platform, which indicates that the technology is commercially viable for trade finance. HSBC and Dutch bank ING completed the deal for Cargill last week when a shipment of soybeans was transported from Argentina to Malaysia through the global
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HSBC and Dutch bank ING successfully completed the world’s first trade finance transaction using a single blockchain platform, which indicates that the technology is commercially viable for trade finance.

HSBC and Dutch bank ING completed the deal for Cargill last week when a shipment of soybeans was transported from Argentina to Malaysia through the global subsidiaries of commodity traders in Geneva and Singapore, the British lender said in a statement.

The transaction, whose terms have not been disclosed, was completed using Corda’s letter of credit (LC) system, which is being processed from a standard of five to 10 days to 24 hours.

The transaction was an end-to-end exchange between a buyer and seller and their corresponding banks that were completed in a shared digital application rather than multiple systems, according to HSBC. It was the first scalable live trade finance transaction using blockchain, it added.

HSBC said the transaction was executed on a platform called Corda, which was developed by R3, a blockchain consortium based in New York, whose members include more than 100 banks, regulators and trade associations.

“At the moment, buyers and suppliers use a letter of credit, typically concluded by physically transferring paper documents, to underpin transactions,” Vivek Ramachandran, global head of innovation and growth at HSBC’s commercial banking unit told Reuters.

 

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