HSBC, the British banking company executed the very first financial transaction using blockchain for Reliance Industries to an American client, which resulted in reduced processing time of the documents. Reported the Financial Express on November 4.
A joint statement issued by HSBC and Reliance Industries noted that the blockchain-enabled letter of credit transaction facilitated a shipment between US-based Tricon Energy and Reliance Industries (RIL).
Srikanth Venkatachari, the joint chief financial officer of RIL asserted in the statement, “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.” Further, it said, the blockchain platform integrated along with the electronic bill of landing (eBL) to issue and manage an electronic bill of lading; this allows buyer and seller in the underlying trade to digital transfer of the title of goods.
It’s a significant improvement for any organization working in the buying and selling of goods internationally, as it helps to bring all parties involved onto one platform, the statment claimed.
Hitendra Dave, HSBC’s head of global banking and markets said that the blockchain technology has a transformative impact on financial transactions and provides greater transparency as well as enhanced security in addition to making it faster and simpler. Adding to it further he continued, the technology is cost-effective, results in quicker turnaround and has a potential to unlock the liquidity for businesses. To validate the transaction between Tricon and RIL, the LC was issued by the ING Bank, Brussels for Tricon Energy US with HSBC India for Reliance as its negotiating and advising bank, it said, stating the transaction validates the operational as well as the commercial ability of blockchain as an alternative to mainstream paper-based documentation.