- HSBC India and RIL said blockchain minimizes errors and saves time and money
- The end-to-end transaction on “R3’s Corda” blockchain platform
- The development comes when India’s cryptocurrency industry is going from bad to worse
Blockchain technology is revolutionizing international trade and making it faster, cheaper. HSBC India and RIL have said blockchain will minimize errors and make it easier to amend documents, ultimately saving time and money after executing a first-of-its-kind blockchain trade finance transaction.
According to The Business Standard, a joint statement by the two institutions on Sunday November 4th says digitization of business through the Distributed Ledger Technology will help to reduce bureaucracy, improve security, minimize errors and make it easier to amend documents, and ultimately save time and money.
According to the statement, the blockchain-enabled letter of credit expedited a shipment between Reliance Industries and a United States’ based company Tricon Energy validating the operational and commercial viability of the blockchain technology as a substitute for the traditional exchange of paper-based documentation. The joint statement said:
“This is an industry-first as the blockchain platform integrated with ‘Bolero’s electronic Bill of Lading’ (eBL) platform to issue and manage an electronic ‘Bill of Lading’[…] this allowed a digital transfer of the title of goods from the seller to the buyer in the underlying trade. It further enabled the underlying trade to be fully digitized.”
They implemented the end-to-end transaction on “R3’s Corda” blockchain platform which is a single-shared application as opposed to the need for different isolated digital systems operating on different platforms in different locations around the globe. ING Bank issued the importer a Letter of Credit while HSBC India served as the advisor and negotiating bank for the exporter Reliance Industries of India. The statement added:
“This solution is a significant improvement for any organization involved in buying and selling goods internationally, as it truly brings together all parties onto one platform.”
Crypto still stifled in India
The development comes when the state of India’s cryptocurrency industry is going from bad to worse, with the latest reports showing the government was mulling imposing a blanket ban on the use of digital currencies, a plant that the country’s Financial Stability and Development Council was working towards.
Most recently, India’s cryptocurrency industry has suffered huge losses after the country’s leading crypto exchange Zebpay closed shop and shifted its base to Malta with plans to expand to 20 European countries besides the arrest of the co-owner of Unocoin after setting up India’s first Bitcoin ATM in a Bengaluru Mall.
Several Indian banking institutions like SBI, ICICI Bank and Yes Bank are all working on blockchain-based solutions and believe trade finance is among the best use cases for the Distributed Ledger Technology because of its ability to cut time and expenses.