Hong Kong trade finance goes Deloitte-fully blockchain
Deloitte, the Hong Kong Monetary Authority (HKMA) and trade finance banks in Hong Kong have developed a distributed ledger technology (DLT) proof of concept (PoC) for trade finance.
Industry participants include Bank of China (Hong Kong), the Bank of East Asia, Hang Seng Bank, HSBC and Standard Chartered (Hong Kong). The blockchain project has created a platform for banks, buyers and sellers, and logistics companies.
Li Shu-pui, executive director of the HKMA, says the PoC has shown “potential” but there are “still a number of matters such as legal, regulatory and governance issues which need further consideration”.
The participants, like many others, state DLT digitises the “paper-intensive processes through smart contracts, reducing the risk of fraudulent trade and duplicate financing, and improving the transparency and new product innovation of the industry as a whole”.
There have been other blockchain-powered trade finance initiatives around the world.
ICICI Bank and Emirates NBD executed the “first” banking transactions using Infosys’ blockchain in international trade finance in India and the UAE respectively.
Barclays and fintech start-up Wave claimed to have become the first organisations to complete a global trade transaction using DLT.
R3 and over 15 of its blockchain consortium member banks completed two prototypes for smart contracts.
ID to insurance
Deloitte’s blockchain team has more than 800 people across 20 countries. It has developed more than 30 blockchain-related prototypes, in such uses as digital identity, digital banking, cross-border payments, trade finance, and loyalty and rewards solutions, and the investment management and insurance sectors.