HSBC Uses Blockchain Technology in Letter of Credit

HSBC recently announce its use and patronage of blockchain in a letter of credit between Australia and China. The banking giant reportedly used Voltron as its main platform.

Based on the report by Ledger Insights, Australia-based company, Fox & Lillie, sent a shipment of wool from the country to China’s SDIC International Trade Nanjing Company. International Investment further notes that there were 19 tons of wool in total.

Why Use Blockchain

According to Ledger Insights, the company has decided to use the blockchain trade finance platform primarily because of its desire to digitize and improve its overall services. With China at the centre of commerce and in providing letters of credit (LC), amounting to almost $750 billion in 2018 alone, the banking giant sees the use of this technology to help provide a faster turnaround time for all parties involved.

By using this type of innovation in the industry, International Investment reports that all parties involved would have access to documents and other important reports in real time. Through this breakthrough technology, companies can help cut costs, risk, and long processing times.

A Closer Look on Voltron

Voltron is the main platform used by HSBC in providing letters of credit. This new platform in the market was developed and improved by eight major banks looking to leverage the R3 Corda technology. These major financial institutions include Bangkok Bank, BNP Paribas, CTBC Holding, HSBC, ING, NatWest, SEB, and Standard Change. These banks have also partnered with blockchain firms such as Bain, CryptoBLK, and R3 to help bring their innovation to life, notes International Investment.

Through this platform, developers and financial establishments aim to resolve long processing times when it comes to letters of credit, exchanges, and the like between exporters and importers.