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HSBC, ING Bank execute first blockchain transaction
Last update: 05/06/2018

KUALA LUMPUR, June 5 (Bernama) --HSBC and ING Bank have successfully executed the first live†trade finance†transaction via blockchain for a†shipment of soybeans from Argentina to Malaysia.

The transaction was conducted†via Cargill's Geneva and Singapore subsidiaries, with†the company†mainly involved†in the international food and agriculture business, HSBC said in a statement.

The deal was financed using a Letter of Credit (LOC),†which was completed digitally on R3's scalable Corda blockchain platform, marking a†tipping point in the way goods are bought and sold.

HSBC's Global Head of Innovation and Growth,†Commercial Banking,†Vivek Ramachandran†said†this is an inflection point for how trade is conducted.†

"At the moment, buyers and suppliers use a LOC, typically concluded by†physically transferring paper documents, to underpin transactions.

"With blockchain,†the need for paper reconciliation is removed because all parties are linked on the†platform with†instantaneous updates. What this means for businesses is that, trade†finance transactions have been made simpler, faster, more transparent and†secure," he added.

†This technology is ideally suited for trade because it helps†streamline a previously paper-intensive process which usually takes between five to 10 days†to exchange documentation,†but†this exchange was done in 24 hours.

According to the United Nations, digitising all of the Asia-Pacific region's trade-related†paperwork could slash the time it takes to export goods by up to 44 per cent.

In doing so,†costs are also cut†by up to 31 per cent, while†boosting exports by as much as US$257 billion annually.

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Source: Bank Negara Malaysia

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