Media ININ Economy We Trust
Media IN 14 \ 05 \ 2018
HSBC has announced the launch of its first global trade finance deal, using an individual cluster platform, in an effort to boost the effectiveness of international trade finance.
The bank said in a statement that Dutch bank ING had sealed the deal for Cargill last week, when it moved a shipment of soybeans from Argentina to Malaysia via the two branches of the global commodities trading company in Geneva and Singapore.
Despite the existence of other commercial financing deals in which the series of blocks were used with other technologies, the Cargill deal is the first use of a single digital subscriber application rather than multiple systems.
The use of block chain technology in the banking sector is expected to reduce the risk of fraud in letters of credit and other transactions, as well as reduce the number of steps.
Letters of credit are the most widely used method of financing between importers and exporters, helping to secure transactions of more than $ 2 trillion, but the process involves long paper transactions and takes between five and 10 days for documents to be exchanged.
The Bank of England cited a United Nations study that the conversion of all Asia-Pacific business-related desktops into electronic format could reduce the time it takes to export goods by up to 44 percent and reduce costs by as much as 31 percent.
“Letters of credit continue because of real challenges, the lack of digital infrastructure, and the challenge of multi-party coordination,” Vivek Ramachandran, head of innovation and development at HSBC’s business unit, was quoted as saying.
“This platform helps us overcome the first challenge. I believe that technology and everyone’s focus on it gives us the momentum to tackle the second challenge with results that we hope will be much better than we have seen in the past,” said Vivek.
Ramachandran said HSBC already had another customer waiting for the next deal.
The cluster chain technology uses a book of accounts distributed across a network of computers to verify transactions rather than a centralized system.
And the application of a series of blocks to Cargill deal, powered by 12 banks, which may help to use this technology in the broader market.
