A conglomeration of banks have launched a new blockchain service in Hong Kong, according to Channel NewsAsia.
Modernising the network
The aim of eTrade Connect, as it is called, is to modernise the world’s trade finance network, which was worth around $9 trillion in 2017. Despite its size, the market is outdated and largely paper-based. A survey commissioned by Asian Development Bank found that $1.5 trillion worth of trade finance requests are not met because of inefficiency.
The new platform will use blockchain technology to render transactions digital and automate them where appropriate. An added benefit will be diminishing the risk of fraud by cutting the number of steps involved in a transaction.
The banks involved include HSBC of London, Standard Chartered of London, Agricultural Bank of China of Beijing, BNP Paribas of Paris, and the Hong Kong Monetary Authority, which is the central bank of that jurisdiction. They have been working on the project since July 2018.
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HSBC said in a statement that the platform has cut its loan approval time to four hours from one and a half days.
The platform uses Hyperledger Fabric, which is a blockchain that hides transaction amounts on the distributed ledger to all except the relevant parties.
e.Trade Connect will collaborate with We.trade, which is a similar network developed by a group of European banks including Deutsche Bank of Frankfurt, Santander of Santander, Société Générale of Paris and Nordea of Copenhagen. HSBC was also involved in this development. Work on the system began in October 2017, and it was first tested in July 2018.
It is currently available in eleven European countries.
HSBC said that one of the first live transactions with eTrade Connect was executed with Pricerite, a household gods retailer. “Blockchain has transformed a cumbersome, complex process into a simpler but more secure and efficient way of conducting trade,” said Bankee Kwan, chairman of said company.