Hong Kong and Singapore plan to link trade finance platforms they are developing with blockchain technology, a move aimed at curbing potential fraud and errors in the funding of international trade, Reuters reports.
“This interface is likely to be the first of its kind in the world in the application of DLT in solving the century-old problem arising from the inefficiency of the paper-based trade finance system,” Norman Chan, head of the Hong Kong Monetary Authority (HKMA), was quoted as saying at a conference on Wednesday.
Late last year, the HKMA together with banks including HSBC and Standard Chartered tested the use of distributed ledger technology (DLT), also known as blockchain, to build a trade finance platform.
Meanwhile, Singapore is also developing a platform.
Linking the two is part of a broader plan between HKMA and the Monetary Authority of Singapore to collaborate in blockchain and other financial technology projects, according to an announcement from the two de facto central banks.
Hong Kong’s project can digitize trade documents, automate processes, allow sharing of required documentation among authorized participants, and reduce human errors and the risk of fraud, Chan said.
The HKMA and consortium of banks are now in the process of hiring a developer to create and commercialize their platform, the central bank chief revealed.
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