Reliance Industries scripts history, along with HSBC, executes first of its kind blockchain trade finance transaction
HSBC India and ING Bank Brussels have successfully executed a blockchain enabled, live trade finance transaction jointly with Mukesh Ambani led Reliance Industries (RIL) and Tricon Energy, HSBC said in a statement today.
HSBC India and ING Bank Brussels have successfully executed a blockchain enabled, live trade finance transaction jointly with Mukesh Ambani led Reliance Industries (RIL) and Tricon Energy, HSBC said in a statement today. Significantly, this is the first blockchain transaction in the industry. The technology allowed a digital transfer of the title of goods from the seller to the buyer in the underlying trade, enabling the underlying trade to be fully digitised. This is a significant improvement for any organisation involved in buying and selling goods in the global market. The technology brings together all parties onto one platform.
The Letter of Credit (LC) was issued by importer ING Bank for Tricon Energy USA with HSBC India as the advising and negotiating bank for exporter Reliance Industries, India, it said. The end-to-end transaction was executed on R3’s Corda blockchain platform. This is a single shared application, rather than requiring multiple isolated digital systems across various counterparties, located around the globe.
This validates the commercial and operational viability of blockchain technology as an alternative to conventional exchanges for paper-based documentation.
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At present buyers and sellers use paper-based LCs for transactions in the international market. Physical documents are sent to the parties by post, courier or fax. The time and cost involved in processing the physical documents are deterrents for exporters and impairs the pace of trade.
R3, HSBC, ING, and other six banks are supporting the Corda application (Bangkok Bank, BNP Paribas, CTBC Holding, NatWest, SEB and Standard Chartered). These banks are seeking to expand the network on open source basis to drive adoption across the industry, the statement said. Technology partners can provide banks and customers tool kits for easier onboarding, ecosystem participants, besides buyers/sellers and their banks.
HSBC has taken the lead in digitising, shaping and evolving the Trade ecosystem globally through industry leading initiatives, it said.