One of the largest banks in the world, HSBC recently announced about completing the first ever blockchain based trade finance transaction in the world. According to the official source, the UK based world’s largest trade finance institution conducted the deal with American food and agricultural giant company, Cargill.
As reported, the banking giant completed the world’s first ever trade finance transaction- a letter of credit, for one of the US’s largest private company, Cargill. It was confirmed that the process of the transaction was entirely powered by blockchain technology.
Some general details of the deal were also unrevealed by the source, informing that the contract processed last week. The deal included a shipment of soya beans from Argentina and Malaysia.
This transaction was taken as the first trial for testing the effectiveness of similar operations. Due to the positive results of the recently successfully completed deal, the specialists see great potential for blockchain technology to take hold in the global trade finance market. According to the source, the market can be worth up to $9 tln.
Head of innovation and growth for commercial banking at HSBC, Vivek Ramachandran stated that they see the new platform as a utility for successful transactions. This could mean that the new technology may be an answer for those world’s largest corporations that are looking to save resources on processing costs as well as improve security of transactions and operations via switching to digital solutions from paper-based deals.
As many fans of the field can remember, HSBC had been looking into possible applications of the blockchain technology in trade finance for at least a year now. Back in March 2017 the bank partnered with the Central Bank of Hong Kong on a proof of the concept.