Some of the leading finance and banking giants ING and HSBC have inked trade finance transaction with Cargill, which is leading food trading company with help of the single blockchain system.
According to the report, this was the first transaction around the globe, in which shipment of soybean was exported to Malaysia and Argentina. In the whole transaction, Cargill Geneva traded the goods on Argentina arm team’s behalf and on behalf of the Malaysia arm Cargill Singapore received the same.
Banking giant, HSBC stated that there are various other deals related to trade finance that is to be carried out jointly with other technologies. However, Cargill was the first one to carry out the transaction with the help of a single blockchain application.
As per the source, the trade finance transaction was performed with the help of R3’s distributed ledger technology (DLT) platform Corda through credit tool letter.
The credit letter engaged was issued by HSBC, while the role of advising bank was played by ING. The long paper-based process of 5–10 Days was reduced to 24 Hours. The letter of credit was exchanged through the blockchain, while other transactions such as lading bill were excluded.
After the success of the transaction, HSBC is emphasizing on more live tests and eventually targets to uphold the system for wide adoption in industry, said the global head of innovation at HSBC Commercial Banking, Vivek Ramachandran.
“There are still more steps to be performed prior to the adoption,” he added.
The news flashed post-HSBC revealing its plans to introduce various pilot programs based on current PoC (proof-of-concept) projects.
“The technology has advanced drastically, and we are much more contented with its scalability and security,” said Joshua Kroeker, senior innovation manager, HSBC.
It is anticipated that adoption of blockchain will be high in terms of the financial sector as this sector witnesses the highest complexities in its procedure.