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HSBC processes the first blockchain a letter of credit with the help of the Chinese yuan

FILE PICTURE: HSBC-logo-in New York, New York, united states of america, August 7, 2019. REUTERS/Brendan McDermid/File Photo

HONG KONG (Reuters) – HSBC completed the first yuan-denominated blockchain, on the basis of a letter of credit transaction, the bank said on Tuesday.

HSBC, like many of its competitors, it is based on the use of the digital general ledger accounting, technology, or blockchain, to streamline the traditional paper and red tape issues to the financing of the business.

If the first transaction is the use of the Chinese currency, the deal is a major step forward in the use of the-Voltron-trade finance platform, which was developed by eight banks, including BNP Paribas and Standard Chartered as HSBC.

As far as the transactions with the help of the platform in the first place, to the individual pilot, but Ajay Sharma, HSBC’s regional head of global trade and receivables finance for Asia-Pacific, said that progress had been made in the direction of a full proposal, and which may be of a commercially acceptable as a model for the banking industry.

“We are hoping that we will have something by the end of the year, maybe first quarter of next year, which we know of Voltron, what the costs will be, and at that point in time, many of the banks would be able to sit on the sidelines will be able to make a decision,” he said.

“We are hoping that by using this technology, the unit cost of doing a transaction and it comes down to it, together with other advantages as well, such as the speed limit.”

HSBC said, citing the SWIFT data, and that 1.2 million of letters of credit, document issued by a bank guaranteeing that a buyer’s payment to seller in the amount of US$750 billion is spent on them, in and out of China, in 2018.

This particular deal is concerned, the Hong Kong-based MTC, the Electronic export of a consignment of a liquid crystal display components, and panels are attached to the company, the Shenzhen MTC will be based across the border from Hong Kong.

The exchange of electronic documents and forms completed within 24 hours, as compared to the typical five-to 10-day standard document exchange, the bank said.

Report by Alun John

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