Recent reports from the Hong Kong Monetary Authority show that they will launch a one-of-a-kind multi-bank blockchain trade finance platform in August. The platform will link almost all the major banks in Hong Kong including behemoths like HSBC and Standard Chartered.
Blockchain technology has taken over almost all the industries and its application in the banking sector is aimed to make it more secure and seamless. The reports show that the banking sector will be made more rapid, with account holders benefitting from the change.
OneConnect, Ping An Group’s technological wing, will be responsible for building the multi-bank system and ushering in a new wave of change for the $9 trillion finance sector. OneConnect is also responsible for the cryptocurrency banking integration in China. The government led project will look to the banks such as HSBC to help in implementing the system. Notably, in May last year, HSBC announced that the company had executed the world’s first blockchain based trade.
The Hong Kong Monetary Authority [HKMA]’s project hopes to be the world’s first government-led system that achieves this blockchain-based feat. Jessica Tan, Ping AN Group’s Deputy Chief Executive, stated:
“Instead of individual banks trying to do this you have the regulator trying to bring the banks together.The platform will be owned by the banks that have partnered with the Hong Kong regulator. The final number of financial institutions has not been confirmed but 21 banks are expected to join.”
According to a survey conducted by Financial Times, it was reported that “using blockchain, some transactions will process in just one day against up to fourteen days using current methods”. Reports show that blockchain will also allow small players in the market to create a bigger impact by providing a level playing field. The companies will also be able to utilize the information it gets from the trade and finance sectors.
The HKMA is the government authority in Hong Kong responsible for maintaining monetary and banking stability. Its main functions are:
- Maintaining currency stability within the framework of the Linked Exchange Rate system.
- Promoting the stability and integrity of the financial system, including the banking system.
- Helping to maintain Hong Kong’s status as an international financial center, including the maintenance and development of Hong Kong’s financial infrastructure.
- Managing the Exchange Fund.
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