Now the Hong Kong Monetary Authority (HKMA) declared the official launching of its blockchain trade finance platform called as eTradeConnect. It was formerly known as the Hong Kong Trade Finance Platform. Additionally, there are plans to collaborate with we.trade that until today has aimed at Europe.
The platform entails digitizing trade files to automate the transaction finance procedure. The benefits anticipated are higher efficacy and decreased risk from preventing fraud and identity theft. Ultimately the intention is to facilitate commerce by increasing credit availability and decreasing funding costs.
The first version provides open accounts trade fund for example factoring. However, the purpose is to expand into other kinds of trade finance and outside banking.
Howard Lee, Deputy CEO of the HKMA, said, “It’s a remarkable moment to see the arrival of this very first blockchain-based trade finance platform constructed by key industry players at Hong Kong. It illustrates the openness of the financial sector to embrace new technology from the new age of banking.”
It follows a proof of concept (PoC) began in December 2016 and finished in March this past year. Deloitte conducted the PoC, and Ping An’s OneConnect assembled the newest version with Deloitte providing consultancy.
The first seven banks are ANZ, Bank of China (Hong Kong), Bank of East Asia, DBS Bank (Hong Kong), Hang Seng Bank, HSBC and Standard Chartered. Another five banks united later. They’re the Agricultural Bank of China, Bank of Communications, BNP Paribas, ICBC and Shanghai Commercial.
Integrating with additional platforms
Last year, an agreement was signed to collaborate with the Monetary Authority of Singapore to join both local commerce platforms to earn cross-border commerce funding more economical and fraud-resistant.
Now a Memorandum of Understanding was signed up with we.trade to construct a PoC which incorporates both platforms. Both initiatives utilize similar technology and also have HSBC for a member. HSBC is also included with the Voltron Letter of Credit project which started lately.
Lee commented: “Our second crucial milestone is to connect eTradeConnect with programs from different areas so as to empower cross-border financing. The connection between eTradeConnect and we.trade system paves the way for the digitalization of cross-border transactions at the Asia and Europe commerce corridor, also will function as a fantastic benchmark for the future connection of eTradeConnect to other transaction fund platforms.”
Roberto Mancone, COO of all we.trade, added, “Our co-operation supports our roadmap and since the very first step of creating “network of networks” in blockchain based trade finance option. This exciting alliance has the capability to unlock commerce fund barriers for involving Europe and Asia.”