Hong Kong's central bank is launching a blockchain-backed trade finance
platform as blockchain can the due diligence time as well as easily
detect fraud.
Hong Kong's central bank is expecting their newest blockchain-backed
trade finance platfrom to go live next month. With 21 banks expected
to join, including HSBC and Standard Chartered, the platform aims to
upgrade the services of the financial industry in the region.
As reported by the Financial Times. Small companies across the world are
often declined for access to bank services due to "the increasing costs
of due diligence required to sign up new clients."
With the blockchain technology, the time to process the paperwork as
well as the number of manpower required to do the tasks, such as
verifying and confirming and confirming the credentials, can be cut
significantly from fortnight to just one day.
The platform's designer, OneConnect, claimed that their blockchain-
based technologies have been implemented in China and have encouraged
small businesses to gain wider accesses to banking services.
The newly-developed platform's owner, the Hong Kong Monetary Authority,
can also expect for a reduction in fraud as the blockchain system will
enable all parties to "view the level of financing requested and
reduce the ability to acquire excess funds" once the trades are logged
in.
this is not the first time blockchain is used to back finance trade
platforms. Earlier this month, a group of notable European banks
announced their new blockchain-backed platform, we.trade, with Deutsche
Bank, HSBC, and Rabobank included in the group.
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