HSBC makes first blockchain trade transaction

HSBC and ING Bank have successfully executed the first scalable live trade finance transaction using blockchain for Cargill, an international food and agriculture conglomerate, says a press statement.

Last week, a shipment of soybeans was transported from Argentina to Malaysia, via Cargill's Geneva and Singapore subsidiaries.

The deal was financed using a Letter of Credit, which was completed digitally on R3's scalable Cordablockchain platform, marking a tipping point in the way goods are bought and sold.

The transaction demonstrates that blockchain is a commercially and operationally viable solution for trade digitisation.

Up until this point, banks, buyers and suppliers had been experimenting with blockchain, testing proofs of concepts and conducting internal pilots.

However, this Letter of Credit transaction was an end-to-end trade between a buyer and a seller and their respective banking partners, completed on a single and shared digital application rather than multiple systems.

Moreover, the blockchain platform used is already being supported by 12 banks, who are working with R3 and their partners to continue the development to bring the platform to market more broadly.

This technology is ideally suited for trade because it helps to streamline a previously paper-intensive process which usually takes between 5-10 days to exchange documentations. This exchange was done in 24 hours.