LONDON: Banking giants HSBC and ING on Monday said they had carried out a landmark blockchain transaction aimed at speeding up payment processes and making them more secure.
The transaction, using the cutting-edge blockchain technology driving virtual currencies like bitcoin, involved a bulk shipment of soybeans from Argentina on behalf of US agriculture group Cargill, the pair said in a statement.
“HSBC and ING Bank have successfully executed a… finance transaction for international food and agriculture conglomerate Cargill using R3’s Corda scalable blockchain platform,” the statement said.
“The transaction demonstrates that blockchain as a solution to trade digitization is commercially and operationally viable. “Conventional exchanges for paper-based documentation related to letters of credit usually take between 5-10 days. This exchange was done in 24 hours,” it added.
Going forward, blockchain is seen as being able to also support trading of other assets.
London-headquartered HSBC and Dutch lender ING meanwhile described the novel letter of credit transaction as “an end-to-end trade between a buyer and a seller and their respective banking partners, completed on a single shared application rather than multiple systems”.
While banks are seen as reducing costs by using the latest blockchain technology, consumers may also benefit from quicker and cheaper services.
HSBC’s head of growth and innovation, Vivek Ramachandran, noted that thanks to the development, “trade finance transactions have been made simpler, faster, more transparent and more secure”.
Blockchain technology group R3’s CEO David E Rutter explained that the platform “Corda enables the development of applications… that bring all parties together on a single, shared infrastructure while ensuring the highest levels of privacy and security”.