HSBC Completes LC Transaction Using Voltron Blockchain Platform

Blockchain, News | April 3, 2019 By:

Banking giant HSBC has successfully completed a live letter of credit (LC) transaction between Australia and China using Voltron, a blockchain trade finance platform.

First announced in October 2018, Voltron was developed by major banks and blockchain firms, including Bangkok Bank, BNP Paribas, CTBC Holding, HSBC, ING, NatWest, SEB, Standard Chartered, Bain, CryptoBLK, and R3. The platform is designed to resolve an issue concerning the long process of paper-based letters of credit exchanged between importers and exporters, and other parties including shipping companies and banks.

The live LC transaction was conducted in collaboration with Fox & Lillie and China SDIC International Trade Nanjing Company. The two companies, which are both HSBC clients, used the Voltron platform to send a shipment of wool from Australia to China.

Ajay Sharma, HSBC’s Asia Pacific Regional Head of Global Trade and Receivables Finance, noted that China is the world’s largest issuer of LCs by value – almost $750 billion in 2018. He said that digitizing this market will shake up trade finance in China – reducing the amount of paperwork required to complete a transaction, shortening turnaround time and greatly lowering the cost of trade.

Trading companies, such as China SDIC International Trade Nanjing Company, have long dealt with issues in paper-based transactions including the lengthy time needed in the exchange of documents, delays caused by amendments and lack of security and transparency. Using a blockchain platform like Voltron will help companies to enhance the security of the process as it enables authenticating the source of data and documents.

“We are ready to further explore the new technology more broadly together with our banking and trading partners,” said Yang Xiaoxiong, Chairman of China SDIC International Trade Nanjing Company, which operates the Nanjing wool market – the largest in China.

Last month, HSBC announced that it was looking to commercially launch the Voltron platform in the near future as the bank expands its alliances with other banks and tech companies.