HSBC Bank and Bank of America have joined Infocomm Development Authority of Singapore to collaborate on blockchain technology. The banks said they had created the world’s first application using blockchain technology to simplify one of the most cumbersome aspects of trade finance. The banks joined with Infocomm Development Authority of Singapore to emulate a letter of credit transaction. Letters of credit are one of the most widely used ways to reduce risk between importers and exporters. By putting the transaction on a distributed ledger, the importer and its bank, together with the exporter and its own bank, can see the data in real time. It creates a shared database in which participants can trace every transaction. HSBC trade finance business global head of product Vivek Ramachandran that discussions are underway with other banks, corporate clients and shipping companies to further develop the technology.
