HSBC Performs World’s First Trade Finance Transaction Using a Single Blockchain Platform

  • HSBC issued a letter of credit to ING for agricultural giant Cargill.
  • It used a blockchain platform called Corda developed by FinTech startup R3.
  • The paperless trade finance transaction was completed in only 24 hours instead of the usual 5-10 days when lots of paperwork needs to be passed around.

Banking giants HSBC and ING announced on Monday that they have performed the world’s first commercially viable trade finance transaction using a single blockchain platform; this could lead to mass adoption of blockchain technology in the $9 trillion trade finance market.

UK-based bank HSBC issued a letter of credit (LoC) for American agricultural commodities trader Cargill to Dutch bank ING. The transaction involved a shipment of soybeans from Argentina to Malaysia. The letter of credit -- which is a document issued by a buyer's bank to the seller's bank to guarantee that payment will be made to the seller provided that conditions are met -- relied on the use of Corda distributed ledger platform, which was designed and developed for the financial sector by FinTech startup R3. Although this was not the first blockchain technology had been used for trade finance, it was the first time that such a transaction had been completed using only a single shared blockchain platform rather than also relying on other systems.

Although LoCs are widely used for financing trades between exporters and importers, the process usually involves lots of paperwork and requires five to ten days for exchange of documents. Using the Corda blockchain platform, HSBC and ING were able to complete the exchange in only 24 hours. 

Here is what Vivek Ramachandran, global head of innovation and growth at HSBC’s commercial banking unit, said about LoCs:

The reason why letters of credit have persisted is because of two real challenges — the absence of digital infrastructure and the challenge of coordinating multiple parties... This platform helps us overcome the first and I think the technology and everyone focused on it gives us the impetus to go after the second now with hopefully much better results than we have seen in the past.

Vivek Ramachandran, HSBC

Ramachandran added:

What this means for businesses is that trade finance transactions have been made simpler, faster, more transparent and more secure... The need for paper reconciliation is removed because all parties are linked on the platform and updates are instantaneous. The quick turnaround could mean unlocking liquidity for businesses.

Vivek Ramachandran, HSBC


OKEx, Skew Release 10 New Trading Data Charts as Partnership Evolves

Popular cryptocurrency exchange OKEx and crypto market derivatives data aggregator Skew have unveiled plans for the second phase of their partnership, release 10 new trading data charts as it evolves.

According to a press release published by OKEx the exchanges was the first one to share data from its futures and options markets through its own dashboard on Skew. The second phase of the collaboration between both organizations will add 10 new advanced charts with “even more in-depth metrics available to them.”

The second phase of the partnership between OKEx and Skew is set to bring various new features, among them the new charts. These include charts such as the BTC futures Aggregated Open Interest, the BTC Perpetual Swap Price vs Spot, and the BTC Options Volumes & Open Interest, among others.

chart.pngSource: OKEx

The new charts come shortly after OKEx expanded its derivatives portfolio with the launch of ETH/USD options on its platform, and with the announcement of EOS/USD options. The cryptocurrency exchange has been leading when it comes to derivatives trading volumes, thanks to perpetual swaps for top cryptoassets like BTC, ETH, and others.

In its announcement, OKEx claims the diversity it offers is appealing to institutional and professional traders who can keep their pricing strategies more flexible. Its main goal, it adds, is to make products “accessible to a wider audience of retail – as well as beginner – traders.” To do this, it invests resources in its Academy.

To bolster the partnership, the cryptocurrency exchange prepared a guide to highlight and explain how to read and analyze the new charts. OKEx’s Director of Financial Markets, Lennix Lai, commented:

We hope to provide even greater transparency for users through this second phase with Skew. That also means helping traders understand how to interpret sometimes complex charts and how to use the information to execute better trades.

Lai added that the guide will help users read and interpret the charts, as they can be “daunting at first and are typically left for advanced users.” As CryptoGlobe reported, last month OKEx announced an OKChain hackathon to boost the development of decentralized applications for its blockchain.

Featured image via Pixabay.