HSBC Holdings PLC said it has completed a commercially viable transaction for trade finance using blockchain technology, marking the world's first such transaction, the Financial Times reported.
Together with Dutch lender ING Groep NV, which served as a counterparty on the transaction, HSBC handled a letter of credit for U.S.-based food and agricultural group Cargill. The lenders used financial technology consortium R3's Corda blockchain platform to finance a shipment of soybeans from Argentina to Malaysia in the week of May 7, according to the report.
The introduction of blockchain in the trade-finance industry is expected to reduce the number of paper documents needed for a transaction as documentation would be electronic, and processing time is expected to be cut to hours from days.
The transaction paves the way for blockchain technology to be adopted for commercial use across the industry as the transaction conducted for Cargill could be replicated if the same counterparties were involved in the process, the FT said.
"The next stage is actually encouraging as many participants as possible to sign up to the utility," the British bank's head of innovation and growth for commercial banking, Vivek Ramachandran, said.