HSBC conducts world’s first trade finance transaction using blockchain
Category: #world  By Saif Ali Bepari  Date: 2018-05-15
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HSBC conducts world’s first trade finance transaction using blockchain

The London based HSBC Holdings plc has claimed to have successfully carried out the world’s first commercially feasible trade finance transaction powered by blockchain technology. As per reliable sources, HSBC issued a letter of credit to the Dutch bank ING to complete a transaction of the U.S. food and agriculture company Cargill.

Reportedly, the latest exchange involved a major consignment of soybeans that was to be shipped from Argentina to Malaysia. It has been said that HSBC utilized a platform developed by blockchain start-up R3 known as Corda. For the record, R3 works with a consortium of banks to create numerous blockchain solutions to solve a diverse set of problems.

According to trusted sources, the transaction was executed by both the banks within 24 hours. Traditionally this procedure requires up to five to ten days to get completed with a lot of back and forth exchanges between the parties involved and numerous paper records.

Speaking on the development, the Head of Growth and Innovation at HSBC, Vivek Ramachandran was quoted stating that the need for paper reconciliation has become redundant as the concerned parties are now linked on the blockchain platform and the updates are instantaneous. He further stated that the latest technology allows quick turnaround which results in unlocking liquidity for various businesses.

For the uninitiated, the letters of credit are issued by one bank to another to guarantee that a payment would be received by a seller under a predefined set of terms and conditions. Reportedly, numerous banks are utilizing the principles behind blockchain technology such as the idea of a decentralized ledger and have applied it to financial services that they are carrying out.

Sources reveal that major financial entities across the globe have been pouring in massive funds into blockchain projects as the technology has now garnered the tag for having disrupted the financial services sector.



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Saif Ali Bepari

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Saif Ali Bepari

Saif Ali Bepari currently works a content writer for Market Size Forecasters, Algosonline, and numerous other platforms. A Computer Science graduate who has a zest for writing over coding, he has previously dabbled into technical and creative writing. He now pens down...

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