Hong Kong Monetary Authority’s Blockchain Trade Finance Platform Officially Launchesbr>
The Hong Kong Monetary Authority (HKMA), the country’s central bank, has officially launched its blockchain trade finance platform.
The platform, called eTradeConnect, was first announced in Oct 2017 following fruitful results of an earlier proof-of-concept (PoC) trial facilitated by the HKMA. It was developed in collaboration with twelve major banks in Hong Kong. These include the Australia and New Zealand Banking Group (ANZ), Bank of China (Hong Kong), The Bank of East Asia, DBS Bank (Hong Kong), Hang Seng Bank, The Hongkong and Shanghai Banking Corporation, Standard Chartered Bank (Hong Kong), Agricultural Bank of China, Bank of Communications Co, BNP Paribas, Industrial and Commercial Bank of China (Asia), and Shanghai Commercial Bank.
The new blockchain trade finance platform is designed to reduce the risk of fraudulent activity, while increasing business transparency, operational efficiency and productivity in trade finance. It will allow small companies to give their data over to the major banks easily, and gain access to the same finance mechanism that larger companies use.
“It is a remarkable moment to witness the birth of the first blockchain-based trade finance platform built by key industry players in Hong Kong,” said Howard Lee, Deputy Chief Executive of the HKMA. “It demonstrates the willingness of the financial industry to adopt new technology in the new era of smart banking.”
In order to facilitate cross-border trades, the HKMA partnered with we.trade, a blockchain platform developed by nine major European banks, including Deutsche Bank, HSBC, KBC, Natixis, Rabobank, Societe Generale and UniCredit, Banco Santander and Nordea. Launched in June of this year, we.trade aims to facilitate cross-border trades to be conducted in a seamless, simple and trustful manner.
According to we.trade, the collaboration of the two platforms, with similar functions using similar technology, creates strong bonding and synergy towards the development of a global network of networks.
“The connection between eTradeConnect and we.trade platform paves the way for the digitalization of cross-border trades in the Asia and Europe trade corridor, and will serve as a good reference for the future connection of eTradeConnect to other trade finance platforms,” Lee said.
Roberto Mancone, COO of we.trade, said that the collaboration concerns not only IT connectivity but also operational models, legal frameworks, and governance between the networks and their users.
“This type of co-operation between platforms will be more and more necessary going forward, given the decentralization and proliferation of global digital solutions,” said Mancone. “It is exciting for we.trade to be at the forefront of this movement and co-developing the first such interconnection development between trade platforms. Our aim is to develop a framework that can be applied to connect to other networks in the future.”