The central banks of Hong Kong and Singapore have revealed that numerous banks are signed up to their recently-announced blockchain-oriented trade network. The new technology and innovative ideas at the heart of this network make it an appealing prospect for forward-thinking financial institutions, so this news should be nothing but encouraging for cryptocurrency enthusiasts.
It is expected to launch in 2019, and will now involve the participation of more than 20 global banks and financial institutions, according to a Business Times report. The proof-of-concept is called the Hong Kong Trade Finance Platform, and it is a collaboration between the Hong Kong Monetary Authority and the Monetary Authority of Singapore. It aimed to digitise trade finance through the use of distributed ledger technology.
Officials from the two monetary authorities say the DLT pilot – defined as a ‘global trade connectivity network’ – hopes to set “new global standards” for the industry, with the objective of tracing global trade flows between Hong Kong and Singapore. It’s exciting to see two such prosperous yet traditional countries take action to establish a blockchain-based trade network – further evidence of the growing recognition of cryptocurrencies as a major player in the future of the finance world.
Li Shu-Pui, the current executive director of the Hong Kong Monetary Authority, said that concerns have been raised by bankers regarding the privacy of data and transactions – something that will no doubt be echoed by traders and other interested parties as the launch date approaches. As a result, Li says regulators should take care to consider rules around distributed ledger technology. He backed this statement by saying DLT is an emerging form of innovation in the ‘mission-critical’ trade finance industry.
Li also gave some indication that he expects to see European financial institutions becoming involved in the project as it makes progress.