HSBC Holdings (50.18, 0.25, 0.50%) said on Monday that it has completed the world's first trade financing transaction using blockchain technology, and has taken steps to increase efficiency and reduce the number of trillions of dollars in international trade financing. An important step.
HSBC cooperated with Holland International (15.99, -0.02, -0.12%) (ING) and successfully used blockchain technology to issue a letter of credit for food and agriculture giant Cargill.
The use of blockchain technology in the banking industry is expected to reduce the risk of fraud in letters of credit and other transactions, and simplify the trading process.
The letter of credit is one of the most widely used ways of reducing the risk between importers and exporters, helping to provide guarantees for transactions worth more than $2 trillion. But this process will generate a lot of paperwork and it takes five to ten days to exchange documents.
Vivek Ramachandran, head of global innovation and growth at HSBC’s commercial banking division, said: “This means for businesses that trade finance transactions will become simpler, faster, more transparent and safer.”
HSBC cited a study by the United Nations that if all trade-related paperwork in the Asia-Pacific region were conducted electronically, it could reduce the time required to export goods by 44% and reduce costs by 31%.