Hong Kong and Singapore have reached an agreement to link their perspective trade finance platforms using blockchain technology, according to news from Reuters on Wednesday (Oct. 25).
The Hong Kong Monetary Authority (HKMA) and the Monetary Authority of Singapore announced their plans this week as an effort to combat errors and fraud in cross-border trade. The HKMA has been working with HSBC, Standard Chartered and other banks on a blockchain-based trading platform, while Singapore has been working on its own solution.
According to reports, plans to link those two platforms are part of larger efforts by the authorities to collaborate on distributed ledger technology (DLT) and FinTech projects.
“This interface is likely to be the first of its kind in the world in the application of DLT in solving the century-old problem arising from the inefficiency of the paper-based trade finance system,” said HKMA Head Norman Chan at a conference, reports said.
Chan added that Hong Kong’s solution digitizes trade documents and automates trade processes to streamline and safeguard the sharing of data and information between trading partners and participants. The HKMA is now looking to work with a developer to develop the platform, reports said.
Earlier this year, Standard Chartered said it would begin piloting the trade finance platform it developed with the HKMA, which formed the DLT Trade Finance Working Group. In April, the group said it had completed a proof of concept.
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As FinTech innovators explore the potential for distributed ledger technology to disrupt the industry, trade and trade finance have become a favorite use case, with experts eyeing how DLT can provide a faster, safer, more consolidated way for trading partners and banks to exchange information and money.
