HSBC made history after it completed the world’s first trade-finance transaction with Cargill using blockchain
HSBC Singapore, in conjunction with Cargill and ING, executed the world’s first, live trade finance transaction using the blockchain
The exchange was for the bulk shipment of soybeans by Cargill from Argentina to Malaysia.
The fund was sent through Cargill’s trading arm in Geneva and was purchased by a subsidiary in Singapore.
HSBC made history after the banking giant claimed to have completed the world’s first trade-finance transaction with Cargill using blockchain. HSBC used a platform developed by blockchain startup R3 called Corda. HSBC and ING said that the exchange was performed in 24 hours instead of 5-10 days if they had used the traditional process.
“This is an inflection point for how trade is conducted,” Vivek Ramachandran, HSBC’s global head of innovation and growth for commercial banking, said in the statement. “With blockchain, the need for paper reconciliation is removed because all parties are linked on the platform and updates are instantaneous.”
According to Singapore-based E2, the blockchain allowed HSBC and ING to build, send and approve the Letter of Credit on one integrated platform. Usually, this transaction would have involved the internal systems of both ING and HSBC, which would later then require that the transaction be done via paper. What does this mean going forward? Vivek Ramachandran, HSBC’s head of growth and innovation, said: “The need for paper reconciliation is removed because all parties are linked on the platform and updates are instantaneous. The quick turnaround could mean unlocking liquidity for businesses.”