Banking giants HSBC and ING have effectively completed a trade finance deal by using blockchain technology. The podium is ready for commercial use, according to HSBC.
HSBC Holdings announced on Monday it had productively carried out the globe’s first trade finance transaction through distributed ledger technology (DLT), what is more commonly referred as blockchain. The London-based banking leader and Dutch peer ING played a part on behalf of US agribusiness conglomerate Cargill.
The banks anticipate that DLT will minimize fraud dangers in letters of credit and bring down the number of steps during the procedure. Credit letters are among the trendiest payment methods in world trade. Also known as documentary credit, they symbolize a written response in which a bank, on behalf of the purchaser, assures a seller the reimbursement will be made as per the agreement in place. The entire trade process can take approximately 10 days, which is prolonged for all parties engaged. Blockchain can automate various procedures, saving time and money.
