HSBC, along with Reliance Industries, administers trade finance transaction on Blockchain technology

HSBC India and ING Bank Brussels have successfully executed a Blockchain-enabled, live trade finance transaction jointly with Reliance Industries and Tricon Energy.

The Blockchain platforms integrated with Bolero’s electronic Bill of Lading (eBL) platform is to issue and manage an electronic Bill of Lading. This allowed a digital transfer of the title of goods from the seller to the buyer in the underlying trade. It further enabled the underlying trade to be fully digitized.

The end-to-end transaction was executed on R3’s Corda Blockchain platform which is a single shared application, rather than requiring multiple isolated digital systems across various counterparties, located around the globe. The Letter of Credit (LC) was issued by ING Bank for Tricon Energy USA (importer) with HSBC India as the advising and negotiating bank for Reliance Industries, India (exporter). This solution is a significant improvement for any organization involved in buying and selling goods internationally, as it truly brings together all parties onto one platform.

This transaction validates the commercial and operational viability of Blockchain as an alternative to conventional exchanges for paper-based documentation.

R3, HSBC, ING, the other six banks supporting the Corda application (Bangkok Bank, BNP Paribas, CTBC Holding, NatWest, SEB and Standard Chartered) are seeking to expand the network on an open-source basis to drive adoption across the industry. This includes technology partners that can provide banks and customers tool kits for easier onboarding, ecosystem participants, besides buyers/sellers and their banks.

Hitendra Dave, Head – Global Banking & Markets, HSBC India, says, “The use of Blockchain is a significant step towards digitizing trade. It has a transformative impact on trade finance transactions and enables greater transparency and enhanced security in addition to making it simpler and faster. The overall efficiency it brings to trade finance ensures cost-effectiveness, quicker turnaround and potentially unlocks liquidity for businesses. We’re delighted to partner with Reliance Industries and support enhanced digitization in trade finance. We believe that the collaborative approach adopted to develop this technology has the potential to transform conventional trade finance.”

Srikanth Venkatachari, Joint Chief Financial Officer, Reliance Industries, says, “We are excited to partner with HSBC on digitalization of trade finance. This reflects our continued commitment to embrace emerging technologies and industry-first initiatives. The use of Blockchain offers significant potential to reduce the timelines involved in exchange of export documentation from the extant 7 to 10 days to less than a day. When adopted at scale, it helps in significant optimization of working capital. Further, use of Blockchain in trade finance enhances transparency, security and synergy across all the parties and stakeholders involved.”