Hong Kong to Develop Blockchain Trade Finance Platformbr>
James Henry Lau, Hong Kong’s Secretary for Financial Services and the Treasury, said the country is developing a blockchain-based system for trade finance.
Lau believes the technology could provide “great benefits” to trade finance in countries participating in China’s Belt and Road initiative, a development strategy proposed by China’s paramount leader Xi Jinping that focuses on connectivity and cooperation between Eurasian countries, primarily the People’s Republic of China (PRC), the land-based Silk Road Economic Belt (SREB), and the ocean-going Maritime Silk Road (MSR).
He said that blockchain could cut the huge input of human resources and time that trade financing traditionally requires, reduce chances of fraud, and lower companies’ investment costs through more efficient settlements.
“Trade along the Belt and Road is mostly conducted by small and medium-sized enterprises, so blockchain’s distributed ledger technology could help by cutting out the need for a central organization and middlemen,” said Lau.
The news follows Hong Kong’s recent partnership with Singapore on a cross-border trade project based on blockchain technology. The Hong Kong Monetary Authority (HKMA) and the Monetary Authority of Singapore (MAS) were working on a trade finance cross-border platform that aims to reduce potential fraud and errors.