The Hong Kong Monetary Authority, which in effect acts as the special administrative region’s central bank, will reportedly launch a blockchain-based trade finance platform. Moreover, this will not be some ”concept platform”, as 21 banks are already said to be attached to the venture.
The Hong Kong Monetary Authority will not undertake this all on its own, as it is being reported that the authority has joined with the OneConnect, the fintech subsidiary to the major Chinese company Ping An Group, in a joint venture in order to realize this project.
More specifically, the platform will be developed in order to reduce the amount of paperwork currently needed for trade finance solutions to be processed. It will also help a great deal with both costs and the security risks faced by participants, according to a report from the Financial Times.
The blockchain-powered solution will essentially reduce the amount of bureaucracy needed in order to give new upstart businesses access to banking services. When the initiative launches, which it is planned to do in August, it will also lead to a marked reduction in the time it will take for transactions to be processed.
As is, the current methods can take up to two weeks for transactions to be fully registered and transacted. Using the new blockchain-based solution from the Hong Kong Monetary Authority and OneConnect, some of these transactions will now be processed in a mere day.
This comes as the Chinese government is continuing its long-standing push to eliminate much of the stiff and time-consuming bureaucracy that threatens to smother certain upstart business in the Asian nation.
Until now, China has been largely unsuccessful in accomplishing this, however this venture – if successful – might see the Asian nation implement blockchain technology in order to speed up other parts of its bureaucracy.
Somewhat notably, this joint venture between the Hong Kong Monetary Authority and OneConnect was initially announced in November of 2017. Moreover, it is the first time a Hong Kong regulator has taken sides to ”bring banks together”, according to one of Ping An’s executives.
The executive pointed to the fact that a single regulator was doing this, rather than individual banks, as something that lends credence to the initiative. Moreover, Ping An is no newcomer to the field of blockchain-based solutions, which it has already developed and deployed on the domestic Chinese market.
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Rasmus Pihl is a writer for Toshi Times by day and an avid follower of the cryptocurrency industry by night. Rasmus holds a Bachelor’s Degree in Marketing from the Gothenburg School of Business, Economics, and Law and runs a Swedish marketing consulting firm. Moreover, when he isn’t writing for Toshi Times, traveling, working or changing the world in some other capacity, Rasmus is more than likely caught up in postgraduate studies.