HSBC, ING conduct trade finance transaction using R3's Corda blockchain platform

HSBC said it had completed a blockchain transaction with ING Bank

HSBC and ING facilitated a shipment of soybeans to Malaysia from Argentina using the blockchain.

While there have been several instances of proof-of-concept transactions performed using the blockchain, this one between HSBC and ING is the first that indicates its commercial applications, a spokesperson said to CNBC.

They both successfully executed the first live trade finance transaction using Blockchain for Cargill, an worldwide food and agriculture conglomerate.

According to a report on Bloomberg, HSBC Holdings Plc has successfully carried out a trade finance transaction with the use of the blockchain technology indicating that the doubt over the use of the technology for trade finance should be laid to rest.

Traditionally, these transactions take between five and 10 days to complete and typically require numerous paper records that need to be signed by all parties involved. This exchange was done in 24 hours.

"The reason why letters of credit have persisted is because of two real challenges - the absence of digital infrastructure and the challenge of coordinating multiple parties".

HSBC said the transaction announced on Monday can be replicated and shows the technology is ready to be adopted across the industry. The success could pave the way for a blockchain-based trade financing utility.

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The announcement is excellent news not only for the bank but also for the companies involved in global trade finance.

When cryptocurrency grasped mainstream attention in the latter half of 2017, banks around the world began taking notice.

Banks are also developing blockchain applications to simplify other back office processes such as the settlement of securities trades.

Blockchain is the underlying distributed ledger technology that powers Bitcoin and other cryptocurrencies (see WikiTribune reporting). In the Cargill transaction, 12 different banks supported it.

"Singapore is both a global and regional trade hub".

Referring to a study of the United Nations, HSBC said that using blockchain and transforming all trade-related paperworks into the electronic format can cut the time by up to 44%, and expense by up to 31%, in exporting goods.

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