informationinformation, HSBC India branch recently conducted a trade financing transaction, which is an export trade between India's Reliance Industries and Sanguang Energy Corporation of the United States. In it, blockchain technology is used, which reduces the time required to process documents.
Srikanth Venkatachari, Sanguang Energy's joint chief financial officer, said in the statement: "The use of blockchain has significant potential to reduce export-related document exchange time from the existing seven days to less than one day."
The blockchain technology is combined with the electronic bill of lading platform to issue and manage the electronic bill of lading; at the same time, the ownership of the goods is digitally transferred from the seller to the buyer in related transactions through smart contracts. Through the storage of distributed data, blockchain technology records the relevant information of export trade in an orderly list, that is, blocks. All stakeholders can view progress in real time with high transparency.
Many banks are researching blockchain solutions. The application of blockchain technology in trade finance can effectively shorten transaction time, and trade finance is one of the best use cases for blockchain technology. In terms of application in this field, in addition to being simpler and faster, it can also increase transparency and enhance security.
HSBC has previously used blockchain technology in the company's operations.For example, in May of this year, HSBC completed the first blockchain-powered global trade finance transaction. HSBC partnered with ING at the time to provide a letter of credit for food and agriculture giant Cargill’s soybean shipment from Argentina to Malaysia via R3’s distributed ledger platform Corda.
Recently, HSBC, Standard Chartered and 10 other banks launched a new blockchain trade finance platform eTrade in Hong Kong to improve the efficiency of multi-trillion dollar international trade financing.
Since the blockchain is open, transparent and non-tamperable, when this technology is applied to trade financing settlement, exporters, importers, and banks can transfer paper-based documents, such as export documents, etc. Blockchain technology realizes encrypted electronic transmission. Therefore, the application of blockchain technology to the field of trade financing can solve many problems that originally existed in the industry.
