HSBC To Pilot Live Blockchain Transactionsbr>
HSBC senior innovation manager Joshua Kroeker has revealed that the bank is close to launching a series of pilots in an effort to begin transitioning to live blockchain transactions.
During a private media call earlier this week, Kroeker said that the bank is “confident enough to actually do a live transaction” using blockchain technology, having spent the past two years working through various teething issues.
The pilot programs will be based on pre-existing proof-of-concept (PoC) projects. HSBC has been conducting trials with the technology for several years now. In August 2016, HSBC announced that it was testing blockchain technology to replicate letters of credit.
“Going from that PoC in 2016, we’re at the tipping point of getting our customers involved in live transactions in the coming weeks and months,” said Kroeker. “The technology has come a long way, we’re much more comfortable with its security and scalability. That’s the stage we’re at now, we want to get the customers involved to do those pilots. The next stage after that, in getting it live into production, is a further amount of work around the application but more work on the network.”
Kroeker said many of the bank’s clients have begun the process of digitizing their operations, but the product that gives them the most trouble is the letters of credit. “This product is one of the first we’re going to pilot, which is going to be exciting,” he added.
The bank in the process of integrating customers into its pilot programs. Although more blockchain research needs to be done. A network must be in place so that the full transaction can be completed on the blockchain, which means on-boarding other banks, regulators, customs and all parts of the trade cycle.
“We see that developing throughout the year so that in 2019, around the same time, we should be in a position to have both the network of banks, corporates and others, and the app ready to use on a wider scale,” Kroeker said.