HSBC recently facilitated India’s first blockchain trade finance transaction. This development reinforces the narrative that despite the negative stance towards cryptocurrency in India, there is some focus on the benefits of blockchain technology in the country.
Details of the Transaction
According to The Times of India, the British Banking behemoth recently executed a trade finance transaction via the blockchain in India – a first for the country. The transaction involved Indian conglomerate Reliance Industries (RIL) and a U.S.-based client; Tricon Energy.
In a joint statement released by HSBC India and Reliance Industries, Srikanth Venkatachari, the co-chief financial officer of RIL said:
The use of blockchain offers significant potential to reduce the timelines involved in exchange of export documentation from the extant seven-ten days to less than a day.
The statement also revealed that a blockchain-based letter of credit (LoC) transaction executed a shipment between RIL and Tricon Energy. An electronic bill of lading (eBL) formed part of the blockchain matrix, thus allowing a seamless transfer of the title of the products from RIL to Tricon Energy. Brussels-based ING bank issued the LC for the transaction on behalf of Tricon Energy. HSBC served as advisers and negotiators for RIL.
According to the statement, the adoption of blockchain technology can drive efficiency in international trade. These improvements are made possible by bringing all participants unto a single platform making data exchange a less complicated process.
Apart from speed, the technology also offers improved transparency seeing as all stakeholders can view the progress of the transaction in real-time. Earlier in the year, Live Bitcoin News reported that HSBC claimed to have made the world’s first commercially viable blockchain-based finance transaction.
Blockchain, Not Bitcoin
The news of the blockchain-enabled trade finance transaction in India comes at a time when there is a concerted crackdown on cryptocurrency in the country. Recently, the police arrested co-founders of a company called Unocoin for installing an illegal Bitcoin ATM.
Since the middle of the year, the Reserve Bank of India (RBI) – the country’s apex bank, prohibited commercial banks from providing services to cryptocurrency exchange platforms. This measure has forced platforms like Zebpay to shutter their operations in the country in favor of more crypto-friendly locales.
What do you think about India’s blockchain technology adoption against the backdrop of its cryptocurrency crackdown? Let us know your thoughts in the comment section below.
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