China and Hong Kong to partner on new blockchain-based trade finance platform
New development comes after Chinese president signals support for blockchain technology
The central banks of Hong Kong and China are partnering on a new blockchain project to improve trade finance operations, in a further sign of Beijing’s sudden chain of heart on the technology.
The new project will see subsidiaries of the Hong Kong Monetary Authority (HKMA) and the People’s Bank of China (PBoC) collaborating on the trial of a platform to connect two existing trade finance initiatives. The project aims to link HKMA’s eTradeConnect and the PBoC’s Trade Finance Platform, creating more efficient processes.
The trial will begin in early 2020, HKMA said in a statement, adding: “Once the connection has successfully been established, it will provide firms in both places with more convenient trade finance services and enable banks in Hong Kong to expedite the expansion of their trade finance business.”
eTradeConnect is a blockchain-based trade finance platform developed by a consortium of twelve major banks, including HSBC and Standard Chartered. It was launched last year with the aim of securely automating the trade finance process.
In a surprise move, Chinese president Xi Jinping recently called for China to accelerate the development of blockchain. At the same time, the country started removing online posts claiming blockchain was a scam. Adverts for blockchain courses have now started popping up on Chinese social media.
Xi’s personal endorsement of blockchain has had an immediate response, with Chinese regional governments and other organisations pledging development funds for blockchain projects worth $5.7 billion (£4.4 billion), according to one local financial media outlet.
China has also vowed to create the world’s first sovereign digital currency.
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