The Hong Kong Monetary Authority (HKMA) will launch a trade finance platform underwritten by blockchain in partnership with China’s Ping An Group.
The initiative, which launches in August, will bring together 21 banks, including HSBC and Standard Chartered. It follows HSBC’s world-first blockchain-written trade transaction in May.
Blockchain is fast becoming a part of the global banking industry, with its potential to vastly reduce the time required to process routine trade transactions. Blockchain makes it much easier and simpler to verify each stage in often complex processes, massively speeding up hitherto time-consuming transactions around the world.
Blockchain is a decentralised ledger technology underlying cryptocurrencies such as bitcoin. Instead of using a central clearing process, blockchain draws on thousands of individual computing nodes to verify individual transactions, and this makes it extremely secure.
The HKMA project will be one of the earliest such government initiatives to go live. Jessica Tan, Ping An’s deputy chief executive, summed up its founding principle: “Instead of individual banks trying to do this you have the regulator trying to bring the banks together.”