Standard Chartered Bank announced the successful completion of its first cross-blockchain pilot transactions between Hong Kong and Mainland China. The transaction was carried out between the eTradeConnect platform in Hong Kong and the People’s Bank of China Trade Finance Platform (PBCTFP) in Mainland China. The Chinese central bank previously said it would trial its digital yuan central bank digital currency (CBDC) for exactly this scenario, but no mention of the digital yuan was made.
Standard Chartered is one of the seven banks testing cross-border blockchain transactions between eTradeConnect and PBCTFP. ICBC, Bank of China, and Bank of Communications and their respective Hong Kong subsidiaries also participated in the blockchain interoperability pilot. The blockchain solution aims to make cross-border trade more efficient and secure.
“The Proof-of-Concept trial (PoC) that connects eTradeConnect and the PBCTFP aims to provide importers and exporters in both places with more convenient trade finance services,” said Mr. Colin Pou, Executive Director of Hong Kong’s Monetary Authority. The organization hopes that more banks will join the project in the next phase of development.
Meanwhile, the People’s Bank of China (PBOC) is looking to expand its blockchain trade platform. It initially focused on trade within Guangdong, Hong Kong and Macau. More recently, it expanded across China, and it has plans for Asia and Europe. This partnership with eTradeConnect, which is operated by Chinese firm OneConnect, is likely to facilitate the project’s development. Besides being involved with global banks such as HSBC, Standard Chartered and ANZ, eTradeConnect has relationships with European trade finance network we.trade, backed by major firms such as UBS, Santander and IBM.
The Hong Kong Monetary Authority and People’s Bank of China have been collaborating for over a year on central bank digital currency (CBDC) solutions. A proof of concept was expected to be launched earlier this year through Hong Kong’s eTradeConnect and the PBOC Trade Finance Platform, which was most likely postponed due to Covid-19. We wondered whether this PoC included CBDC, and have requested clarification. After publication It was confirmed that the trial did not involve a digital currency.