Posted 2 years ago | by Ben Armstrong

HSBC Becomes First Bank to Secure Transaction via

Global bank HSBC has become the first to use, a Hyperledger-based platform, to secure a commercial transaction. The platform is designed to facilitate commercial trade in the EU, and is backed by some of the world's largest banks.

Global Trade Review (GTR) reported that HSBC used the platform to settle a trade between Beeswift, which is a Midlands-based (UK) manufacturer of protective equipment, and a Dutch company that was represented by Rabobank. is a New Solution for Global Trade

Ian Tandy, who is the head of global trade and receivables finance for HSBC UK, told GTR that:

“We’ve done a number of transactions (with It’s beta stage at the moment; it’s a pilot. This is the first transaction where we have had two buyers use the system end-to-end, including the ability to write the invoice, agree to trade terms, provide the BPU, and additionally receive funding off the back of that BPU.”

New Ideas in Trade Finance

The platform has a number of options for facilitating global trade, including access to a Bank Payment Undertaking (BPU), which HSBC describes as, “an online equivalent of a letter of credit (LC)” .

Letters of Credit (LC) are an archaic system of securing trade finance, and are being replaced by pilot blockchain based platforms, like The platform has 12 shareholders at the moment.

The shareholders are CaixaBank, Erste Group, Deutsche Bank, HSBC, KBC, Natixis, Nordea, Rabobank, Santander, Société Générale, UBS and UniCredit. All of the shareholders have signed license agreements that should put the platform into real-world use in the near future.

Global Trade is an Important Market

By using the transaction time between UK-based Beeswift and it's Dutch counterparty was cut down from 10 to 12 days, to just 24 hours.

At the moment HSBC is offering the use of at zero cost to its clients, because the bank wants to develop the platform. A HSBC spokesperson commented that will make trade financing, “transparent and more intuitive”.

The platform may also drop the cost of trade finance, though HSBC would not comment on any possible changes in trade financing costs according to GTR.

The global trade in goods was estimated to be worth $16 trillion USD in 2016 by the United Nations Conference on Trade and Development (UNCTAD) in their “The Status of World Trade” report, which is an official publication of the United Nations (UN).

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