UK based bank HSBC, along with the Dutch bank ING, has just completed the world’s first trade-finance deal using blockchain technology according to a report in the Financial Times.
This initial trade consisted of processing a letter of credit for the Cargill Group, involved in the agriculture sector. The transaction dealt with the shipment of soyabeans from Argentina to Malaysia. The paperless, decentralized networks brought about using blockchain technology can reduce the amount of time, money (and paper!) needed to process trade deals.
The banks used the Corda blockchain platform which has been developed by the R3 Consortium. It is also important to note that the process used for providing the letter of credit is scalable and could be repeated easily if the same organisations are involved.
Vivek Ramachandaran, head of innovation and growth at HSBC, has stated that blockchain technologies will have a slow but steady implementation across a range of industries in the future. “The next stage is actually encouraging as many participants as possible to sign up to the utility,” he stated. “We don’t envisage the (blockchain) platform as anything other than a utility.”