HSBC Singapore, Cargill and ING Monday successfully executed the first live trade finance transaction on Corda, a scalable blockchain platform.
The blockchain transaction involved a bulk shipment of soybeans from Argentina, through Geneva’s trading arm of Cargill, to Malaysia, through Cargill’s Singapore subsidiary as the purchaser.
A Letter of Credit was issued using Corda by HSBC to ING. The two banks were acting on behalf of Cargill entities.
The Letter of Credit transaction was 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.
The transaction demonstrates that blockchain as a solution to trade digitisation, is commercially and operationally viable.
Conventional exchanges for paper-based documentation related to letters of credit usually take between 5-10 days, while the exchange in focus was completed in 24 hours.
“What this means for businesses is that trade finance transactions have been made simpler, faster, more transparent and more secure,” said Vivek Ramachandran, HSBC’s head of growth and innovation.
“The need for paper reconciliation is removed because all parties are linked on the platform and updates are instantaneous. The quick turnaround could mean unlocking liquidity for businesses.”
According to HSBC, the improved operational efficiencies, greater security with real-time tracking of goods and documents, and automatic reconciliation of payments is particularly pertinent to Singapore.
This is due to the sheer volume of shipments, both global and regional, that passes through its ports. Singapore’s ports handled a total of 626.2 million tonnes in cargo last year, up 5.5% from 2016, while annual vessel arrival tonnage increased by 5.1% to reach 2.8 billion gross tonnes.
The faster documentation turnaround for each shipment could potentially lead to increased flexibility in liquidity management for businesses and present a significant development for any organisation involved in buying and selling goods internationally.
The success of this live transaction builds a firm foundation for the future of trade finance, especially for Singapore.
“Singapore is both a global and regional trade hub. Our customers are thought leaders in using technology to optimise trade and this represents a key step towards the digitisation of trade,” said Iain Morrison Head of Global Trade and Receivable Finance, HSBC Singapore.
R3 and the group of 12 banks supporting the Corda application are seeking to expand the network on an open basis to drive adoption across the industry. They welcome engagement from banks and other ecosystem participants.
Published: 15 May, 2018
Newbuildings construct at China Merchants Jinling Shipyard, Yangzhou are designed by Kongsberg and will be scheduled for delivery in spring 2025.
‘Let's think of how we can achieve this goal together; “and” not “all”; “multiply” not “divide” and “integrate” not “differentiate”’, states Senior Minister of State for Foreign Affairs and Transport.
Technology still needs checks and balances even though TR48 compliance is already above 70%, Managing Director of VPS Singapore tells Manifold Times.
Norwegian Maritime Authority has chosen to focus on environment-related issues for 2019.
‘Our new scrubber application is significantly more competitive than other scrubber applications on the market.’
‘We are proud to be amongst the first to show the successful steps taken by Singapore’s bunkering ecosystem to remain forward thinking and relevant,’ Choong Sheen Mao, Director of EMF, tells Manifold Times.
Transferred shares of 40 subsidiaries to BVI firm after tribunal awarded claims in favour of Trinity Seatrading; YSPL has also filed a civil complaint against DNV and Liberian ship registry at Nanjing Maritime Court.
ADNOC L&S, Gulf Energy Maritime, Cockett Marine Oil, Mideast/Bahri Ship Management and VPS experts present their views on biofuel bunker hurdles at the VPS Biofuels Seminar in Dubai on 16 March.
‘Bunker barges operate in very local areas so these vessels call at port very often which means it will be a good fit for women with families,’ states Elpi Petraki, President of WISTA International.
“Our Singapore branch is under preparation and is expected to start business at the republic before June 2023,” Managing Director Darcy Wong tells bunkering publication Manifold Times in an interview.
Development to supply B35 biodiesel blend officially takes effect on 1 February; local bunker suppliers will be able to deliver updated spec within March onwards, once current stocks of B30 avails run out.
VPS, Global Centre for Maritime Decarbonisation, Wilhelmsen Ship Management, and INTERTANKO executives offered a multitude of perspectives to 73 attendees during the VPS Biofuels Seminar, reports Manifold Times.
