According to a report in Reuters citing HSBC, the platform, dubbed eTrade Connect, enables it to reduce the time it takes to approve a trade loan to four hours. Currently, the average time is one and a half days. The other banks that are part of the platform include Agricultural Bank of China and BNP Paribas, noted the report.
Reuters noted that trade finance transactions were worth more than $9 trillion last year, but it is a market that relies heavily on paper, using processes and procedures that are decades, if not centuries, old. Blockchain for finance is expected to lower the levels of fraud in letters of credit and other transactions used for trade finance, and to reduce the number of steps in the process.
HSBC said that one of the first transactions created, exchanged and confirmed on eTrade Connect was the purchase of supplies by Pricerite, the furniture and household supplies retailer. The eTrade platform will collaborate with We.trade in Europe, which also has HSBC and Deutsche Bank as participants, noted the report.
“Blockchain has transformed a cumbersome, complex process into a simpler but more secure and efficient way of conducting trade,” said Pricerite Chairman Bankee Kwan in a statement issued by HSBC.
Earlier this month, HSBC announced it is rolling out a suite of application programming interfaces (APIs) to support FinTech collaboration and enhance its corporate financial service offerings. In a press release at the time, HSBC U.S. Commercial Banking announced plans to roll out its Digital Partner Platform, a portal on which third parties, including FinTech firms, can collaborate with HSBC and access a set of APIs. The first API to be available on the platform, which is set to launch early next year, will enable businesses to apply directly for accounts when using the digital platforms of HSBC and its partners. Later on, HSBC said, it plans to include functionality that allows clients in select international markets to open an account across borders.