According to Channel NewsAsia, a conglomerate of banks launched a new service “blockchain” in Hong Kong.
The purpose of ETrade Connect, as it is called, is to modernize the trade finance network in the world, which in 2017 cost about 9 trillion dollars. Despite its size, the market is outdated and mainly based on paper. A survey commissioned by the Asian Development Bank showed that trade financing requests amounting to 1.5 trillion are not met due to inefficiency.
The new platform will use blockchain technology to generate transactions and automate them where necessary. An additional benefit will be reducing the risk of fraud by reducing the number of steps involved in the transaction.
Included banks include HSBC, Standard Chartered, located in London, the Agricultural Bank of China in Beijing, BNP Paribas from Paris and the Hong Kong Monetary Authority, which is the central bank of this jurisdiction. They have been working on the project since July 2018.
HSBC representatives said in a statement that the platform allowed to shorten the loan approval time to four hours from one and a half days.
The platform uses Hyperledger Fabric, which is a blockchain that hides the transaction amounts in a distributed database for all, except for the relevant parties.
E. Trade Connect will cooperate with We. Trade, which is a similar network developed by a group of European banks, including Deutsche Bank of Frankfurt, Santander of Santander, Société Générale of Paris and Nordea of Copenhagen. HSBC has also been involved in this development. The work on the system began in October 2017 and was first tested in July 2018. Now the platform is available in eleven European countries.
HSBC reported that one of the first direct transactions with ETrade Connect was made with PriceRite, a retailer of household goods. “Blockchain has turned a cumbersome, complicated process into a simpler but safer and more efficient way of conducting trade,” said Bankee Kwan, chairman of the company.