HSBC Eyes Massive Overhaul of Global Trade Using Blockchain Transactions
Banking giant HSBC is betting heavily on the use of blockchain transactions for global trade and is currently preparing itself for this massive technological transformation. HSBC believes that the efficient, secure, trusted, and transaction settlements though the blockchain technology will give a massive boost to global trade.
On Tuesday, March 12, Malaysian news publication Bernama reported that HSBC is making heavy investments to adopt the blockchain technology eyeing partnership with other global players.
HSBC’s Asia Pacific Group general manager, Stuart Tait said: “We expect to handle more blockchain transactions for trade. It’s a really great area for us to focus on because we handled about 100 million pieces of paper every year just in trade finance and blockchain technology can be used to digitalize the documents”.
The global trade transactions usually involves multiple parties like importers, exporters, banks, and shipping companies. The existing paper-based process of credit exchange usually takes over 10 days to complete. With blockchain transactions, this processing time would be reduced to less than 24 hours, says Tait.
In the next two years, HSBC plans to invest nearly 15-17 billion USD for the complete blockchain transformation and digitization. However, with multiple parties involved in trade transactions, Tait notes that “It is going to take a while for all these parties to come together and be comfortable about things like blockchain”.
The report from The Korea Times notes that HSBC soon plans for the commercial launch of the Voltron platform which is currently in the pilot stage. Project Voltron was started as part of the R3 Blockchain consortium to streamline global trade process.
Joshua Kroeker, HSBC's innovation director on blockchain said that the bank is eyeing new partnership with global tech and financial companies. Addressing the media, Kroeker said "I am here this week to reach out to Korean banks to collaborate on this blockchain platform for letters of credit."
HSBC has currently partnered with seven financial giants for using the Voltron platform. The names include Bangkok Bank, BNP Paribas, CTBC Holding, ING, NatWest, SEB and Standard Chartered.