The Hong Kong Monetary Authority (HKMA), the autonomous Chinese territory's de facto central bank, is poised to launch a live blockchain trade finance platform within two months.
"The Trade Finance Platform is a blockchain project initiated by 7 banks in Hong Kong. The project has been facilitated by the HKMA and is targeted for launch by September 2018," the authority told CoinDesk via email.
According to a report from the Financial Times on Monday, the HKMA's blockchain platform has 21 banks participating as participating nodes, including HSBC and Standard Chartered.
The project has been public since early in 2017, when reports indicated several banks had completed a test for the trade finance platform, alongside the HKMA, in an effort to bring transparency to data sharing across financial institutions. Participants at the time included the HKMA, Bank of China, Bank of East Asia, Hang Seng Bank, HSBC and Standard Chartered Bank, with consulting firm Deloitte as a facilitator for the project.
"The aims of the platform are to reduce frauds related to trade finance and double financing, and therefore lead to increased credit availability and lowered financing costs in the long run. This may in turn help small and medium-sized enterprises (SMEs) access to trade financing," the HKMA explained today.
Aside from the founding banks, other institutions have also indicated interest in the platform, according to the email, and the HKMA expects more banks to gradually join in the future.
When and if it goes live, the HKMA project will be one of the first live blockchain trade finance platforms backed by a government institution. Earlier this month, a group of European banks also announced that a trade finance blockchain platform dubbed We.Trade, built with help from technology giant IBM, is also live.
Meanwhile, the HKMA is also working with its counterpart in Singapore to develop a blockchain-based trade finance network to settle cross-border transactions. The two partners previously slated a launch date in early 2019.
Hong Kong landscape image via Shutterstock
Read more about
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.