The Hong Kong Monetary Authority and seven local lenders will launch a trade finance platform using blockchain technology in September, reflecting efforts by the city to bolster fintech development and close the gap with regional rival Singapore. “This trade finance platform is the first large-scale multi-bank blockchain project in Hong Kong arising from the fruitful results of one of the HKMA’s proof-of-concept works on trade finance in 2017,” said Howard Lee, deputy chief executive of the HKMA.
Lenders taking part in the project include HSBC and Standard Chartered Bank, Bank of East Asia, Australia and New Zealand Banking Group Limited, Hang Seng Bank, and DBS Bank, according to a statement. Hong Kong’s central banker adds fintech to priorities to burnish city’s role as financial hub “The goal of the platform is to help digitise trade documents and automate trade finance processes to reduce risks and increase the financing capability of the banking industry by leveraging the unique feature of blockchain,” Lee added.
“The next major milestone of this project is to link up with other trade platforms in other jurisdictions to further facilitate cross-border trades.” Plans for the platform were first unveiled in March last year. The HKMA led the development of the project while Ping An OneConnect Financial Technology was the technological provider while Deloitte provided consulting services.
The platform will enable banks and their corporate clients to submit and record purchase orders, invoices and applications for trade financing. The blockchain technology will boost efficiency and lower financial costs for companies by cutting down on paper, making transactions easier to process, as well as reducing the risk of fraud and identity theft.
HSBC global head of growth and innovation of commercial banking Vivek Ramachandran said the platform “is further proof that blockchain has the potential to digitise trade by eliminating inefficient processes and reducing the amount of unstructured paper.” “We believe Hong Kong is well positioned to benefit as one of the most active and dynamic trade markets globally. As the leading international trade bank, HSBC is committed to driving the transformation of trade, making it simpler, better, faster and more secure,” Ramachandran said. Read more from scmp.com…
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