The Hong Kong Monetary Authority (HKMA) has revealed its proof-of-concept (PoC) blockchain platform for trade finance as the country tries to become o
The Hong Kong Monetary Authority (HKMA) has revealed its proof-of-concept (PoC) blockchain platform for trade finance as the country tries to become one of the major global hubs.
The initiative was supported by professional services group Deloitte and five of the city`s top banks, as the joint announcement stated.
“As the largest trade finance bank in the world … we were interested in assisting corporates to track transaction flows, reconcile transactions through invoice or purchase order matching, and reducing the risk of duplicate financing for the participating banks.”, commented Joshua Kroeker, the senior product manager for global trade and receivables finance at HSBC, in an interview with South China Morning Post (scmp.com).
Blockchain, the digital ledger technology behind cryptocurrency bitcoin, provides networks and databases that allow participants to store information in an efficient and secure manner. Thus, the need for central authority is being eliminated, explained the publication.
“The implementation … clearly demonstrates the ownership of the assets or goods being traded, further enhancing Hong Kong’s reputation as Asia’s leading city for trade finance.”, said Robert Rooks, the financial services institution clients and markets leader at Deloitte China as quoted by South China Morning Post.
In September last year, HKMA has established a Fintech Innovation Hub and a regulatory sandbox permitting banks to make proof-of-concept trials and services.
“While some of the largest banks have built their own laboratories, this new Fintech Innovation Hub will cater for the big and small institutions alike such that the industry as a whole would be able to adopt new technologies more speedily and in a more collaborative manner.”, elaborated Chief Executive of the Hong Kong Monetary Authority (HKMA), Norman Chan.
Other projects that develop blockchain applications in trade include a joint endeavor by Standard Chatered & DBS in Asia, the Bank of America along with members of R3 and Microsoft. More recently, Dubai government has collaborated with IBM to launch a blockchain initiative for trade finance.