HSBC and ING two of the world’s most popular financial operators have made for the first time trades by using the blockchain technology. Following the successful transaction, HSBC declared that the platform is ready for commercial release.
The HSBC Group announced not long ago that the bank had made the world’s first transaction by using the blockchain technology, Reuters reported. The operation was made between the London-based HSBC and the Dutch bank ING for a company specialized in agriculture dubbed Cargill. The two financial operators have used the blockchain for a soya beans shipment which had to go from Argentina to Malaysia.
Before the blockchain, the payments for international trades were made through letters of credit or documentary credit. With this system, the buyer uses the bank as an intermediary to make sure that the payments are made safely and on the exact date. The process is lengthy, and it can take even ten days to be confirmed.
The British bank declared that this first transaction is only the beginning, and eventually the utility of the blockchain will boost the efficiency of international trade.
Furthermore, the blockchain could bring fraud risks down to almost 0 percent and create a much more straightforward process.
“At the moment, buyers and suppliers use a letter of credit, typically concluded by physically transferring paper documents, to underpin transactions. What this means for businesses is that trade finance transactions have been made simpler, faster, more transparent and more secure,” stated Vivek Ramachandran, on behalf of HSBC.
The HSBC representative confirmed that the technology is ready to be released for general use. Among other financial services providers, last year the HSBC group joined the R3 consortium to help with the creation of an international payment system based on the blockchain.
Following the successful transaction, the bank tweeted that it has used the Corda blockchain to make everything possible.
HSBC & ING Bank have used Corda blockchain technology to finance a shipment of soya beans from Argentina to Malaysia for food & agriculture conglomerate Cargill. Revolutionising the future of Documentary Trade. #TransformingTrade pic.twitter.com/MOBA1gQYIl
— HSBC (@HSBC) May 13, 2018