Global banking giant HSBC has called for Korean banks to join HSBC-led blockcahin-centric trade financing platform Voltron not only to cut down on costs and time to process trade financing, but also improve transparency.
Speaking at a press conference held in Seoul on March 12, Joshua Kroeker, innovative director on blockchain with HSBC was quoted by Korean media as saying, “Many Korean enterprises want to have a solution that helps them to cut down costs on trade financing. Against this backdrop, Korean banks are strongly called on to join our Voltron network.”
Launched in Oct, 2018, Voltron is a blockchain-based trade financing platform that enables enterprises and banks to process and settle trade financing affairs like LC opening and settlements. R3 and eight global banks formed a consortium to launch the platform, including HSBC, BNB Paribas, ING, and Standard Chartered, just to name four.
The platform is now at a pilot stage and will go live in the near future aiming to digitalize all the processes for letter of credit, or L/C based trade financing.
Joshua Kroeker was quoted as saying that HSBC want to establish ties with Korean banks to cooperate to develop the platform.
According to HSBC, the decentralized system can help reduce time and costs needed for interbank operations. “The biggest impact would be time. Reduced time and transparency will help enterprises to better manage their cash flow and working capital, “ he was quoted as saying, adding, “I am here to reach out to Korean banks to collaborate on blockchain platform for letters of credit.”
Unlike traditional LC–based trade financing that usually takes 5-10 working days to complete the settlements, the blockchain-based Voltron enables all parties concerned to settle their transactions in a matter of 24 hours, as it allows exporters, importers, L/C opening and settlement banks to share and keep track of all transactions processes in real-time. It also helps to improve security and transparency across all processes