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The QA Financial Forum: New York 2018

28 November, 2018
News and research on financial software quality assurance and risk management

HSBC and ING Bank India Complete Trial of Blockchain-Enabled Live Trade Finance Transaction

5 November 2018
HSBC India and ING Bank Brussels, in partnership with Reliance Industries and Tricon Energy, have successfully completed a ”blockchain-enabled, live trade finance transaction.”

HSBC India and ING Bank Brussels, in partnership with Reliance Industries and Tricon Energy, have successfully completed a ”blockchain-enabled, live trade finance transaction”. The participating companies say this is an industry-first, in that the blockchain platform integrated with a platform developed by Bolero to issue and manage an eBL. This allowed a digital transfer of the title of goods from the seller to the buyer in the underlying trade and enabled the trade to be fully digitised.

The transaction was executed on the Corda blockchain platform, developed and managed by industry consortium R3. It used an electronic Bill of Lading (eBL) by Bolero. The integration with Corda was conducted via a Bolero API, whereby the Letter of Credit was created on the Voltron open platform and the eBL was created on Bolero, according to Adam Furgal, Head of Professional Services at R3.

This integration is what makes the transaction a world-first in trade finance, Furgal explained for QA Financial, however it also posed the project's major challenge, which was to create assets on different platforms and integrate them.

The letter of credit was issued via R3's Voltron platform, by ING Bank for Tricon Energy USA with HSBC India as the advising and negotiating bank on the part of Reliance Industries India.

The Voltron platform was launched by R3 and eight banks in August this year. It has been looking for feedback from its corporate clients since its inception, with a successful live transaction with Cargill in May 2018. Voltron is extending its corporate customer programme. The success of this experiment opens up the path for further collaboration between Voltron and its corporate clients.

Corporate customers will be able to connect with their banks and trading partners via a single channel, for both issuance of letters of credit and presentation/exchange of documents across an open network.

 

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