July 16, the Hong Kong Monetary Authority (HKMA), de facto central bank of Hong Kong, is launching a blockchain-based trade finance platform set to link up with 21 banks. According to Financial Times (FT), Hong Kong has chosen Chinese company Ping An Group’s fintech subsidiary OneConnect to develop the system. As of now, 21 banks, including bank giants HSBC and Standard Chartered, have join this initiative, and will co-own the platform with Hong Kong’s financial regulator.

Jessica Tan, the deputy chief executive of  Ping An said that:

“Instead of individual banks trying to do this, you have the regulator trying to bring the banks together.”

This government backed trade finance platform will be designed to connect all the participants across the supply chain, OneConnect’s technologies are able to manage a wide range of the company data with a low cost to attract potential customers and benefit more small to medium enterprises (SME).

Usually, it is hard for small companies to assess to the financial services offered by traditional banking services as they may be required to provide a lot of information about the company. In this condition, the blockchain-powered platform may allow small companies to give their data over to the major banks easily which provide them wider access to supply-chain trade and finance.

When the trade finance platform has been fully implemented, the trade finance in Hong Kong will be much faster. Blockchain technology may effectively reduce the paperwork, cost and transaction time in routine trade finance and supply-chain finance transactions. It may also allows faster verification of complicated financial process and confirms the relevant documents.

The new system becomes a more time-saving and cost reduction industrial solution for banking business and international business. More and more major financial institutions and enterprise may are willing to adopt blockchain-based solutions in a bid to develop a more competitive business model.