Hong Kong’s monetary authority unveils trade finance platform based on blockchain technology

Hong Kong appears set to burnish its credentials as a global trading hub, with its development of a proof-of-concept distributed ledger platform for trade finance using Blockchain technology.

The Hong Kong Monetary Authority (HKMA) led this initiative, which was supported by professional services group Deloitte and five of the city’s top banks, according to a joint announcement on Thursday.

Their project was designed to demonstrate the feasibility of using the distributed ledger technology known as Blockchain to reduce the risk of fraudulent activity, while increasing business transparency, operational efficiency and productivity in trade finance.

“As the largest trade finance bank in the world ... we were interested in assisting corporates to track transaction flows, reconcile transactions through invoice or purchase order matching, and reducing the risk of duplicate financing for the participating banks,” Joshua Kroeker, the senior product manager for global trade and receivables finance at HSBC, told the South China Morning Post.

“This development puts Hong Kong at the heart of a global effort to digitise trade, making it easier, faster and cheaper for businesses.”

Other financial institutions involved in the HKMA initiative were Bank of China (Hong Kong), The Bank of East Asia, Hang Seng Bank and Standard Chartered Bank (Hong Kong).