Hong Kong’s de facto central bank will roll out its proprietary trading finance platform based on the blockchain technology, along with other 21 banks, during this August, as reported by the Financial Times (FT) on Sunday, July 15th.
The multi-bank blockchain-based solution aims to reduce bureaucracy and costs of security risks
The joint venture of the Hong Kong Monetary Authority and the Chinese company Ping An Group, a branch of the OneConnect Fintech group, is intended to significantly lower the bureaucracy and cost of security risks for market participants, informs FT.
A primary goal of the 21-party framework is to cut down on the time-consuming activities and bureaucratic work required to enroll new businesses in the banking services. The project means to do that by easing transactions.
With the use of blockchain, several transactions would be dealt with in only one day versus a fourteen-day limit under current procedures, as stated by the Financial Times.
Blockchain technology brings banks together in Hong Kong and China
Announced in November 2017, initially, the move signals the first case of a regulator “bringing banks together” to enhance trading finance market, as outlined by Jessica Tan, the Ping An Executive Vice President. As reported by the Cointelegraph earlier in May, a preliminary HSBC trading finance arrangement was a small-scale affair, with the participation of a single bank.
“Instead of individual banks trying to do this, the regulator is trying to bring the banks together,” stated Jessica Tan for the Financial Times.
Ping An has already deployed blockchain-powered solutions for the Chinese national market and is hoping that the very same technology will be successful beyond borders, as stated by FT. The business, China’s second-largest insurance provider with total assets of 4.7 billion yuan ($704 billion), teamed up with the R3 Consortium centered on distributed general ledger technology through 2016.