The transaction, using the cutting-edge blockchain technology driving virtual currencies like bitcoin, involved a bulk shipment of soybeans from Argentina on behalf of U.S. agriculture group Cargill, the pair said in a statement. Although this was not the first blockchain technology had been used for trade finance, it was the first time that such a transaction had been completed using only a single shared blockchain platform rather than also relying on other systems.
The transaction demonstrates that blockchain is a commercially and operationally viable solution for trade digitization.
Vivek Ramachandran, the head of innovation at HSBC Global described the successful blockchain transaction as an inflection point for trade. That's far quicker than the five to 10 days normally needed. In the Cargill transaction, the exchange took only 24 hours.
HSBC said the transaction was executed on a platform called Corda, which was developed by R3, a New York-based blockchain consortium whose members include more than 100 banks, regulators and trade associations.More news: NASA is sending a tiny robot helicopter to Mars
"The need for paper reconciliation is removed because all parties are linked on the platform and updates are instantaneous", he continued.
Last Year, HSBC was awarded "World's Best Bank" and "North America's Best Bank for Transaction Services" among a list of many others, at the 2017 Euromoney Awards.
The transaction involved a shipment of soybeans from Argentina to Malaysia by Cargill, a massive food and agricultural company.
Blockchain is the digital technology which underpins cryptocurrencies like Bitcoin. It was developed by R3, a blockchain consortium based in NY.More news: Scientists Have Transferred A Memory From One Snail To Another
According to professionals' estimation, putting all trade-related paper work of Asia Pacific onto the blockchain could help to reduce the time need for goods export by up to 44% and to cut costs by up to 31%.
Banking giants HSBC and ING on Monday said they had carried out a landmark blockchain transaction aimed at speeding up payment processes and making them more secure.
R3 and the group of 12 banks supporting the Corda application are seeking to expand the network on an open basis to drive adoption across the industry.More news: West Ham hold talks with Zorro over replacing Moyes
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