Saturday, 23 February 2019

Hong Kong banks setting up trade finance blockchain platform

Several banks in Hong Kong are launching a trade finance blockchain platform as they target production use in the region.

The cohort of banks includes ANZ, Bank of China (Hong Kong), The Bank of East Asia, DBS (Hong Kong), Hang Seng, HSBC and Standard Chartered (Hong Kong).

The project was first announced in March 2017 as a proof of concept (POC) “leveraging blockchain technology to support the currently labour-intensive trade finance business”.

The banks claim to have worked hard on the model and governance framework to ensure this project could reach a scalable and operational system.

The Hong Kong Monetary Authority (HKMA) has been helping the project, with the implementation led by the Hong Kong Trade Finance Platform Company Limited (HKTFPCL).

The goal of the platform is to 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, according to Howard Lee, deputy chief executive of the HKMA.

“The next major milestone of this project is to link up with other trade platforms in other jurisdictions to further facilitate cross-border trades,” Lee adds.

The platform, built on Hyperledger Fabric, will allow the submission and record of purchase orders, invoices and applications for financing using distributed ledgers, thereby reducing the risks of fraudulent trade and identity theft, and will therefore increase credit availability and lower financing costs in the long run.

The platform is undergoing user acceptance tests, targeting a launch in September this year. The first product supported will be open account financing.

Ping An OneConnect will be the technological provider to the platform, and Deloitte will be the consulting service provider to support its production deployment.

source: bankingtech.com 
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