HSBC, one of the world’s largest banking and financial services firms in the world, completed the first ever blockchain powered letter of credit transaction in the Yuan denomination. The transaction was carried out through the Voltron trade finance platform powered by R3’s Corda and was between MTC Electronics, a manufacturer based in Hong Kong,  as it shipped a batch of LCD parts to Shenzhen MTC, its parent company.

Using the Voltron platform, both parties to the transaction were able to significantly reduce the time it normally takes them to exchange required documents considerably, from a five to ten day period, all the way down to just 24 hours. The HSBC Regional Head of Global Trade and Receivables Finance for the Asia-Pacific region, Ajay Sharma, has expressed that even though the current transaction is a pilot, there is a plan to make it commercially available to many other financial institutions. Sharma also adds that the platform is expected to considerably reduce the cost usually incurred on each transaction.

“We are hoping that we will have something by end of the year, maybe the first quarter of next year, where we will know from Voltron what it costs, at which point, a lot of banks who might be sitting on the sidelines will be able to make a decision. Clearly, we are hoping that through this technology, the unit cost of doing a transaction comes down, along with other benefits, such as speed.”

Recently, HSBC also set a new record as the first bank to conduct a full finance Hyperledger transaction, using the We.trade platform.

Image Credits: Pixabay

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