Business
17:23, 25-Oct-2017
Hong Kong, Singapore to link up trade finance blockchain platforms
["china","other","Singapore"]
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Hong Kong and Singapore have unveiled plans to link trade finance platforms they're developing with blockchain technology. The move will help reduce potential fraud and errors in the multi-trillion-dollar funding of international trade.
The Hong Kong Monetary Authority (HKMA), together with banks including HSBC and Standard Chartered, tested a use of blockchain distributed ledger technology (DLT) last year in order to build a trade finance platform.
Linking the two is part of a broader plan between HKMA and the Monetary Authority of Singapore (MAS) to collaborate in blockchain and other financial technology (fintech) projects, the pair said in a joint statement.
“This interface is likely to be the first of its kind in the world in the application of DLT in solving the century-old problem arising from the inefficiency of the paper-based trade finance system,” HKMA head Norman Chan said at a fintech conference.
VCG Photo
VCG Photo
According to Reuters, the move also comes as banks including HSBC and Bank of America Merrill Lynch and government agencies such as the Infocomm Development Authority of Singapore look to use technology to make trade finance more efficient and reduce the risk of fraud in letters of credit (LOC) and other transactions.
In a joint statement, the HKMA and Singapore's central bank said linking the two is part of a broader plan to collaborate in blockchain and other financial technology projects.
Chan said Hong Kong’s project can digitize trade documents, automate processes, allow sharing of required documentation among authorized participants, and reduce human errors and the risk of fraud.
The HKMA and consortium of banks are now in the process of hiring a developer to create and commercialize their platform, Chan said.
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