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British bank HSBC executed the first Indian financial transaction using the blockchain for a transaction involving an export of Reliance Industries to a US customer. The blockchain activated letter of credit transaction involved a shipment from the company led by Mukesh Ambani to Tricon Energy, a US company, which reduced the time required to process documents.
"The use of the blockchain offers considerable potential to reduce the time involved in the exchange of export documents from seven to ten days unless day one," said the director. LIR, Srikanth Venkatachari.
The blockchain platform has been integrated with the electronic bill of lading (eBL) platform to issue and manage an electronic bill of lading, he said, adding that this allowed for a digital transfer of the vendor's merchandise title to the bill of lading. 39, buyer in the underlying trade.
According to the release, the solution represents a significant improvement for any organization involved in the purchase and sale of goods internationally, as it brings all parties together on the same platform.
Blckchain Solutions is a distributed database that manages an ever growing list of ordered records called blocks. It is considered very transparent because all stakeholders can view progress in real time.
A large number of domestic lenders, including ICICI Bank, SBI and Yes Bank, are working on blockchain-type solutions and consider trade finance as one of the best use cases for technology. because of its ability to reduce delays.
Hitendra Dave, head of banking and global markets at HSBC, said the blockchain has a transformative impact on foreign trade finance transactions, allowing for greater transparency and security, in addition to simplify it and make it faster.
Apart from that, it can ensure profitability, speed up work and potentially free cash for businesses, he added.
For this transaction between Reliance and Tricon, the LC was issued by ING Bank, Brussels, for Tricon Energy US, with HSBC India as a consulting and trading bank for Reliance, he said, saying the transaction validated the commercial and operational viability of Blockchain. an alternative to conventional exchanges for paper documentation.
Explaining the current system, buyers and sellers currently use paper letters of credit to support transactions and physical documents are sent to each party to the transaction by mail, courier or fax.
While the current system offers a high degree of certainty, the time and cost of document processing is a deterrent for exporters.
HSBC has announced that it wants, along with five other banks globally supporting the "Corda application," to extend the network on an open source basis in order to foster their adoption by the entire industry.
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