HSBC makes landmark blockchain transaction

HSBC makes landmark blockchain transaction

A shipment of soybeans was transported from Argentina to Malaysia, via Cargill's Geneva and Singapore subsidiaries.

The London-based bank HSBC has made what it claims is the world's first commercially viable blockchain-based trade finance deal.

While there have been several instances of proof-of-concept transactions performed using the blockchain, this one between HSBC and ING is the first that indicates its commercial applications, a spokesperson said to CNBC.

The transaction took place in one step on a single platform in 24 hours, rather than the days or weeks required for numerous third parties to mediate the transaction, as has been the case up to now.

According to HSBC 's statement, HSBC and Dutch bank ING successfully transferred funds to Cargill, the food and agriculture group.

The transaction marks a tipping point in the way goods are bought and sold, HSBC and ING Bank said in a media release on Monday.

Watch Trailer for Spike Lee's 'BlacKkKlansman'
The film also stars Laura Harrier and is produced in part by Jason Blum of Blumhouse Productions and Jordan Peele . He quickly sets out on a unsafe mission to infiltrate and expose the Klan, by posing as a racist extremist.

It's a lot less exciting than some of the other blockchain technologies we've been promised, which have ranged from decentralised currencies like Bitcoin to literal diamond exchanges, but it's probably the most sensible indication yet of the future direction of the technology. "The quick turnaround could mean unlocking liquidity for businesses", HSBC's head of growth and innovation was quoted saying in a statement.

Analysts say that blockchain could make settling transactions much easier by eliminating or reducing the interoffice paper-shuffling traditionally required to clear a trade.

The news provides further fuel to the debate that promotes blockchain as a solution to modernising modern finance and trade, many of which still rely on outdated computer platforms, or even paper-based systems.

Ramachandran said HSBC already had another client lined up for the next similar transaction.

The announcement is excellent news not only for the bank but also for the companies involved in global trade finance.

Banks have invested millions in developing blockchain applications in a bid to cut costs and simplify back office processes, such as the settlement of securities trades. Corda is supported by 12 banks and this will hopefully allow it to bring the technology to market quickly and on a global scale.