HSBC completes the first blockchain letter on credit transactions in Yuan

Banking and finance giant HSBC has completed the first yuan-denominated letter of credit on a blockchain using Voltron's trading financing platform.

As Reuters reported on September 2, HSBC implemented the first blockchain-based yuan-denominated credit letter with the distribution of R3's Corda-powered Voltron platform. In the cross-border transaction, Hong Kong-based electronics manufacturer MTC Electronics exported a shipment of LCD products to parent company Shenzhen MTC.

24 hours instead of ten days

The Blockchain platform apparently enabled the parties to exchange electronic documents in 24 hours instead of the usual five to 1[ads1]0 days required for traditional document exchange. In a comment on the deal, Ajay Sharma, the regional head of global trade and claims for Asia-Pacific at HSBC, said:

"We hope to get something by the end of the year, maybe the first quarter of next year, where we want to know from Voltron what it costs, at which point many banks that may be on the sidelines will be able to make a decision. ”

Streamlining Trade Finance Documents

R3 in collaboration with eight banks – including Bangkok Bank, BNP Paribas, CTBC Holding, HSBC, ING, NatWest, SEB and Standard Chartered – originally launched Voltron in October last year to digitize trade financing documents and several member banks and companies.

In August, London-based banking and financial services firm Standard Chartered completed its first cross-border blockchain letter of credit in the oil industry with the Thai state-owned oil giant PTT Group.

The pilot consisted of digitization and simplification of his end-to-end exchange of information between all parties in a shipment of an oil product from Thailand to Singapore.