Hong Kong Banks Test Blockchain Trading

Announcements, Blockchain, FinTech, Investing | April 3, 2017 By:

The Hong Kong Monetary Authority (HKMA), Deloitte, and five of Hong Kong’s biggest banks have developed a prototype distributed ledger technology (DLT) proof-of-concept for trade finance.

The initiative is designed to demonstrate the feasibility of using the blockchain to reduce the risk of fraudulent activity. The consortium’s goals are to increase business transparency, operational efficiency and productivity in trade finance.

Reports indicate HKMA, Hong Kong’s de facto central bank, has created the blockchain proof-of-concept platform to be used by banks as financiers of international trade, allowing buyers and sellers at both ends of the transaction to participate, and adding logistics providers such as shipping companies.

The initiative included participation from Bank of China (Hong Kong) Limited, The Bank of East Asia, Limited, Hang Seng Bank Limited, the Hongkong and Shanghai Banking Corporation Limited (HSBC), and Standard Chartered Bank (Hong Kong) Limited.

“We are very pleased to see this industry-led FinTech effort on trade finance,” said HKMA executive director Li Shu-pui. “The proof-of-concept result has shown the potential of using distributed ledger technology for trade finance – though there are still a number of matters, such as legal, regulatory and governance issues, which need further consideration. We will continue to work with the banking industry to explore the possibility to materialize the value proposition of this proof of concept work.”

“We are delighted to have worked with HKMA and the Working Group members in demonstrating the value of Distributed Ledger Technology (also known as ‘blockchain’) in trade finance,” said Deloitte China FSI clients and markets leader Robert Rooks. “Distributed ledger technology has huge potential in financial services to reduce the cost and improve transparency and efficiency. This is an important step in bringing this to reality.”