HSBC (LON:HSBA) and ING announced it completed its first financial transaction using blockchain, the British lender announced today.
HSBC and Dutch bank ING successfully completed the transaction for food and agricultural group Cargill, according to a statement released today by the British bank.
The banks completed the financing through a shipment of soybean, which was transported from Argentina to Malaysia through Geneva and Singapore subsidiaries, the statement added.
Blockchain is a digital technology that is best associated with the controversial cryptocurrencies, such as Bitcoin and Ethereal.
Whilst the surge of Bitcoin has continued to dominant the business news cycle, the real breakthrough may in fact lie within the emerging Blockchain technology.
Banks like HSBC hope that implementing Blockchain will help make trades more efficient, whilst in turn, reducing paper trails.
Moreover, the technology will minimise the potential for fraudulent activity in letters of credit, as once recorded, the data in blockchain cannot be modified or altered.
“At the moment, buyers and suppliers use a letter of credit, typically concluded by physically transferring paper documents, to underpin transactions,” commented Vivek Ramachandran, global head of innovation and growth at the bank’s commercial banking unit.
“What this means for businesses is that trade finance transactions have been made simpler, faster, more transparent and more secure.”
HSBC & ING Bank have used Corda blockchain technology to finance a shipment of soya beans from Argentina to Malaysia for food & agriculture conglomerate Cargill. Revolutionising the future of Documentary Trade. #TransformingTrade pic.twitter.com/MOBA1gQYIl
— HSBC (@HSBC) May 13, 2018
Shares in HSBC are currently trading -0.35 percent at 14.33, as the market reacts to the news.