UK-based HSBC Holdings, one of the world’s biggest international banking and financial services companies, has carried out its first blockchain transaction yesterday, as reported by CNBC.
The transaction has taken place between HSBC and agricultural firm, Cargill. It involved the issuance of a letter of credit from the bank related to a shipment of soy beans between Malaysia and Argentina. The letter was needed to assure the timely receipt of a due payment from the bank on the part of Cargill. If issued by traditional means, the letter would have needed to pass through a long chain of communication both in electronic and paper forms. Given the use of blockchain, however, the letter may now be stored, updated and read by anyone authorized to so, regardless of the type of computer device or network he or she uses.
“The need for paper reconciliation is removed because all parties are linked on the platform and updates are instantaneous, the quick turnaround could mean unlocking liquidity for businesses,” – Vivek Ramachandran, the Head of Growth and Innovation at HSBC commented on the matter.
Such an accomplishment, regardless of its seemingly negligible scale, definitely indicates HSBC’s interest in the field of blockchain. It looks like the bank is determined to keep up with its rival – Barclays – that has been also probing blockchain technologies. Such pioneering attempts of applying blockchain to banking sector contribute to its sooner inclusion into the set of common tools and practices in this sphere.