HSBC and ING execute blockchain-based trade finance transaction for Reliance Industries

HSBC India and ING Bank Brussels have executed a live trade finance transaction involving an export from Indian energy giant Reliance Industries to US-based Tricon Energy using blockchain technology.

In its official release, HSBC said that transaction was an industry first as the blockchain platform integrated with Bolero’s electronic Bill of Lading (eBL) platform to issue and manage an electronic Bill of Lading.

“This allowed a digital transfer of the title of goods from the seller to the buyer,” it said.

In October, R3 and Bolero joined forces to develop a new eBL service using distributed ledger technology (DLT) in order to open up seamless connectivity across multiple trade networks.

The end-to-end transaction was executed on R3’s Corda blockchain platform. The Letter of Credit (LC) was issued by ING Bank for Tricon Energy USA with HSBC India as the advising and negotiating bank for Reliance Industries.

By leveraging blockchain technology, the participants were able to digitize the process and enhance its efficiency. By bringing all parties onto one platform, the solution marked a significant improvement to the existing processes. The transaction validated the commercial and operational viability of blockchain as an alternative to conventional exchanges for paper-based documentation, the press release said.

“The use of blockchain offers significant potential to reduce the timelines involved in exchange of export documentation from the extant 7 to 10 days to less than a day. When adopted at scale, it helps in significant optimisation of working capital,” Srikanth Venkatachari, joint chief financial officer, RIL, said. “Further, use of blockchain in trade finance enhances transparency, security and synergy across all the parties and stakeholders involved.”