The Hong Kong Monetary Authority (HKMA), and a collection of banks, including HSBC, Bank of East Asia Ltd, and Standard Chartered, is poised to launch a live blockchain trade finance platform within two months.
In the trade finance sector, lots of paperwork to verify transactions and to ensure credentials are valid. Now, a new blockchain-based platform is being launched in the coming months to help reform the industry by digitizing documents and automating processes so the banking industry can be protected against fraud and risk.
The aims of the platform are to reduce frauds related to trade finance and double financing, and therefore lead to increased credit availability and lowered financing costs in the long run. This may, in turn, help small and medium-sized enterprises (SMEs) access to trade financing.
Explained by the HKMA.
One key feature of the platform is the ability to cheaply extract company data so potential customers can be reviewed — which is said to make it easier for small businesses to have access to trade and supply-chain finance.
The platform is targeted to launch by September 2018,” via email the authority told CoinDesk.
Since early in 2017, the project has been public when news about various banks to sum up the test for the trade finance platform, together with the HKMA, to drive transparency to data distribution across financial institutions was in action.
At that time the participants were the HKMA, Bank of East Asia, HSBC, Bank of China, Hang Seng Bank, and Standard Chartered Bank, with negotiating firm Deloitte as a project facilitator.
Apart from the founding banks, some institutions have also shown interest in the platform. The HKMA hopes the majority of the banks to gradually unite in the future.
However, the project in Hong Kong is one of the first to go live with government backing.
Meanwhile, the HKMA is also supporting its counterpart in Singapore. They are building a blockchain-based trade finance network to resolve cross-border transactions. Both the partners previously planned a launch date somewhere in early 2019.