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Blockchain Trade Finance Platform Set to Launch In Hong Kong

A blockchain-backed trade finance platform is getting ready to be launched by the Hong Kong Monetary Authority and partners. The system currently stands as one of the largest examples of a government-backed effort to tackle issues in the worldwide trade finance industry.

Those who work in the trade finance sector often sift through lots of paperwork to verify transactions and ensure credentials are valid. Now, a new blockchain-based platform is being launched in the coming months to help reform the industry by digitizing documents and automating processes so the banking industry can be protected against fraud and risk.

The project is a joint effort by the Hong Kong Monetary Authority (HKMA) and a collection of banks, including HSBC, Bank of East Asia Ltd, and Standard Chartered.

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‘Unlock the trading potential of many thousands’

A growing number of banks, governments, and technology firms have turned their eyes to blockchain when it comes to trade finance — one of the main reasons being that people are still looking for a way to unlock liquidity in the supply chain. A study from Ernst & Young said 2,000 leading companies in Europe and the United States have about $1.3 trillion dollars tied up unnecessarily.

The World Trade Organization said in a report how unmet demand for trade finance totals $700 billion dollars across developing Asia and $120 billion in Africa. The agency says bridging these types of gaps would “unlock the trading potential of many thousands of individuals and small businesses around the world.”

The reasons for the lack of liquidity are multifaceted, but some of the biggest barriers have been identified as high transaction costs, physical paper trails that slow down processes, and general complexity when it comes to accounting.

Government Backing

The blockchain is being heralded as a solution to many of the aforementioned issues — primarily because it could be used to eliminate physical paperwork, vastly cut down on transaction times, and make it easier to catch fraud, since parties can view logged trades in the blockchain.

Banking giant HSBC said in May how it was able to execute the globe’s first commercially viable blockchain trade finance transaction on the Corda platform, which was developed by the R3 blockchain consortium. Entities like Deutsche Bank and Rabobank have also teamed up to launch a trade finance platform.

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However, the project in Hong Kong is one of the first to go live with government backing. The system was designed by Ping An Group and will be owned by the banks — who are teaming up with the financial regulator.

One key feature of the platform is the ability to cheaply extract company data so potential customers can be reviewed — which is said to make it easier for small businesses to have access to trade and supply-chain finance.

Officials involved with the project also have plans for the future. HKMA deputy chief executive Howard Lee said the next step of the project “is to link up with other trade platforms in other jurisdictions to further facilitate cross-border trades.”

What are your thoughts on the new blockchain trade finance platform? Let us know in the comments below! 

Images courtesy of Shutterstock, Wikipedia Commons.

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HSBC Online Banking Outage Showcases Bitcoin Network Strength

Source: bitcoin

HSBC Online Banking Outage Showcases Bitcoin Network Strength

Earlier today, the entire online banking platform of popular institution HSBC became inaccessible, leaving millions of customers without access to their finances in an online manner. While technical issues can happen at any time, it is the second time in as many days this type of event has transpired. The Bitcoin network, powered by blockchain technology, has never gone down in its near seven years of existence.

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HSBC Online Banking Has Serious Issues

For most consumers, online banking is the go-to form of accessing financial services in this day and age of digital products and online services. However, once that service becomes inaccessible to millions of users, chaos ensues. To make matters even worse, this issue has been plaguing the banking giant for two days in a row now.

Oddly enough, the HSBC mobile banking services are not affected by this outage. Not every bank customer wants to use their mobile device to check their balances and complete transactions, however. As long as the personal banking portal remains inaccessible, users will not be able to log in through their laptop or computer.

One of HSBC’s spokespeople stated that:

“There is a complex technical issue with our internet banking systems, and our IT team has been working nonstop since yesterday morning to find a solution. This has involved many tests, diagnostics and trial runs. We are getting closer to solving the problem, but are not there yet. We can, however, confirm this is not a cyber-attack or any other malicious act. ”

While it is positive to note this has nothing do with a cyber-attack, the problem needs to be resolved sooner rather than later. Furthermore, HSBC’s reputation had been taking major hits last year, when the bank had to process roughly 275,000 transactions later than expected due to a different internal failure. Among those late transactions were several wage payments between companies and employees.

Despite last year’s promises from the overarching Royal Bank of Scotland to revamp its computer system, it looks like there is still a lot of work to be done. HSBC customers can only hope their bank decides to start offering reliable online banking services in the near future.

Bitcoin Network Has No Downtime

One of HSBC’s major competitors is not suffering from these major accessibility issues. The Bitcoin network, which has been around for close to seven years now, has never had a single day of downtime. Despite some technical fixes that had to be applied throughout the years, the network has always been accessible to people from all over the world.

Bitcoin provides financial services to anyone who wants it, regardless of which bank they use or their credit history. Digital currency is a new form of payment that works on a global scale and is always available to check balances or send and receive transactions. In fact, a lot of big banks are looking to copy Bitcoin’s technology, although it is doubtful they will be able to offer a similar service.

What are your thoughts on online banking outages? How can these be prevented, other than by using blockchain technology? Let us know in the comments below!

Source: Telegraph UK

Images courtesy of HSBC, Shutterstock

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HSBC Online Banking Outage Showcases Bitcoin Network Strength