A new blockchain-based trade finance platform called eTradeConnect has been established by the Hong Kong Monetary Authority in order to improve trading efficiency and increase security when using e-bills online. The platform has been developed by an assembly of 12 major banks in a project that started last year after several test-periods were trialed.
eTradeConnect is the first multi-bank blockchain project on such a large-scale to be based in Hong Kong. All funds for the project have been raised locally by banks for the platform’s development, with 5 more banks joining as the project gained momentum.
HSBC made a deal yesterday and updated prospective users of the system on its development. The platform will directly address the following concerns within the online banking sector in Hong Kong:
The growing challenges arising from fintech such as regulation of different types of technology and internet safety risks.
The use of conducting paper-based financial affairs amounted to over USD $9 trillion in transaction totals from 2017.
Local Hang Seng Bank also recently completed a blockchain transaction between two of the largest accessory designer and manufacturers in Hong Kong for the sale and purchase of hairclips, which really shows how much FinTech has really impacted so many different industries, not only in Hong Kong, but worldwide. The two companies used eTradeConnect to prepare and transmit digital trade documents, and also to auto-match and raise the trade finance request all electronically.
Teng Lin-hui general manager of transaction banking department, BOC Hong Kong said eTradeConnect was an important step toward the e-trading ecosystem.
The HKMA (Hong Kong Monetary Authority) Chief recently released details about HSBCs deals with the new investors. The change is welcomed by officials, as Hong Kong is currently seeing a surge in online trading activities and a number of new security risks are arising from weaknesses in technological processes within the financial industry.