Banking and financial services giant HSBC has completed the first yuan-denominated letter of credit transaction on a blockchain using the Voltron trade finance platform.
Banking and financial services giant HSBC has completed the first yuan-denominated letter of credit transaction on a blockchain using the Voltron trade finance platform.
As Reuters reported on Sept. 2, HSBC conducted the first blockchain-based yuan-denominated letter of credit transaction deploying R3’s Corda-powered Voltron platform. In the cross-border transaction, Hong Kong-based electronics manufacturer MTC Electronics exported a shipment of LCD products to its parent firm Shenzhen MTC.
24 hours instead of ten days
The blockchain platform ostensibly enabled the parties to exchange electronic documents in 24 hours instead of the regular five to 10 days required for traditional document exchanges. Commenting on the deal, Ajay Sharma, the regional head of global trade and receivables finance for Asia-Pacific at HSBC, said:
“We are hoping that we will have something by end of the year, maybe the first quarter of next year, where will we know from Voltron what it costs, at which point, a lot of banks who might be sitting on the sidelines will be able to make a decision.”
Streamlining trade finance documents
R3 in collaboration with eight banks — including Bangkok Bank, BNP Paribas, CTBC Holding, HSBC, ING, NatWest, SEB and Standard Chartered — initially launched Voltron last October in a bid to digitize trade finance documents and attract more member banks and companies.
In August, London-based bank and financial services firm Standard Chartered completed its first cross-border blockchain letter of credit transaction in the oil industry with Thai state-owned oil giant PTT Group.
The pilot consisted of digitizing and simplifying the end-to-end exchange of information between all parties in a shipment of an oil product from Thailand to Singapore.
Source: , CoinTelegraph
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