Oil and gas conglomerate Reliance Industries –in handsof India’s richest person, Mukesh Ambani – has used blockchain to conduct its first initialtrade financetransaction transfer.
In line with a recent news release by a local news media ‘HSBC India,’ Reliance Industries has recentlyconducteda live blockchain-powered trade financetransaction transferunitedlywith US-basedinternational chemical distributor Tricon Energy.
The end-to-endtransferwasexpeditedby banking majors HSBCIndiaand ING Bank, Brussels, andadministeredon enterpriseconsortiumR3’s Corda blockchain platform,the reportadded.
The Corda platform was integrated with a platform provided by U.K.-based trade financedigitisationfirm Bolero International,and wasaccustomedto issue and manage an electronic bill ofshipment.
The release further added that employing the blockchain platform, a letter of credit was issued by ING Bank for Tricon Energy USA [the importer] with HSBCIndia as theadvising and negotiating bank for Reliance Industries,India[the exporter]. A letter of creditis abank guarantee for a buyer’s payment to avendor.
HSBC India’s head forinternationalbanking & markets, Hitendra Dave, aforementioned:
“The use of blockchainmay be avitalstep towards digitising trade.the overallpotencyit brings to trade finance ensuresvalueeffectiveness,fasterturnaround andprobablyunlocks liquidity for businesses.”
Currently, importers and exporters use paper-based letters of credit to underpin transactions, witheverypartycausationdocuments either by post or fax. This manualmethodnotsolelyslows the pace of trade,however conjointlyalso increasethe prices.
The blockchain-powered trade finance platform, onthe oppositehand, is aimed todigitisethatprocess, thereby saving timeand price.
Adding further, Srikanth Venkatachari, joint chief financial officer at Reliance Industries stated:
“The use of blockchain offersvitalpotentialto scale backthe timelinesconcernedin exchange of export documentation from theexistent7to10days toless than just a day.”