Yesterday, CargoSmart announced the completion of an interoperability proof of concept (PoC) with the Hong Kong Monetary Authority’s (HKMA) trade finance blockchain, eTradeConnect. The trial combined supply chain shipping data with trade finance transactions, and also involved PwC, HSBC, COSCO, Hong Kong’s Bank of China and Standard Chartered Bank, OOCL, and the Bank of East Asia.
The firms hoped to show that blockchain could be used in the interoperability of shipping and finance data. This PoC linked the Global Shipping Business Network (GSBN), a blockchain consortium for which CargoSmart is the tech provider, and eTradeConnect. It allowed banks using eTradeConnect to view shipping records, streamlining trade finance for logistics.
When applying for financial services, shipping and logistics firms must provide banks with records, which are then verified. This can be a long and complex process. While storing supply chain documents with blockchain is not new, CargoSmart’s trial demonstrated how documents could be validated and shared between industries efficiently.
“The exchange of trusted and immutable data enabled by blockchain gives rise to a seamless and secured linkage across the global trade and financial sectors. The convergence of both worlds will unleash enormous opportunities for global trade and give impetus to international economic growth,” said Lionel Louie, chief commercial officer of CargoSmart.
As technology provider for the GSBN, the firm has connections with three of the top five global shipping carriers, including COSCO which owns OOCL. While yet to be formally established, the network plans to be a counterpart of eTradeConnect. This combination of leading banks and carriers could be a trade finance force to be reckoned with, rivaling IBM/Maersk’s TradeLens.
HSBC’s head of Global Trade and Receivables Finance for Hong Kong & Macau, Jeanny Ip, stated: “HSBC is committed to transforming and digitising trade to make it faster, safer and more efficient.”
“Based on the feedback we obtained from previous eTradeConnect pilot transactions, HSBC sees the need and demand for a single platform where clients can facilitate cross-border trade. Clients are telling us that they want a more comprehensive customer journey, one that removes duplication. This is a win-win for all participants of international trade,” she continued.
CargoSmart previously completed a separate interoperability PoC between blockchains within the shipping sector. That time, however, it was facilitated by Deloitte, not PwC.
Meanwhile, the central bank-led eTradeConnect counts ANZ, DBS Bank, BNP Paribas, and the banks involved in yesterday’s PoC as members. Today it was revealed that the platform will leverage China’s upcoming central bank digital currency to link it with the $11 billion Bay Area Trade Finance Blockchain Platform.