HSBC has successfully pioneered Malaysia’s first letter of credit deal for Simply Packaging Sdn Bhd (Simply Packaging) with a Singaporean company in the import of resin transaction. The transaction that is executed via blockchain technology is notably the first blockchain project done by HSBC Malaysia.
According to a report in Fintech News Malaysia, a cross border trade between Malaysia and Singapore reached a value of US$85 billion in 2018. Although the physical transfer of goods between neighbouring countries usually takes less than 2 days, the delay in delivery often comes from a slow, manual administrative paperwork.
Fortunately, by leveraging on blockchain technology, the whole process is digitized through the e-presentation of key trade documents by enabling electronic bill of lading, end-to-end visibility for all parties among others, thus resulting in effective inventory management and short turnaround time.
Blockchain technology enhances businesses by simplifying the process and reducing transaction time. The use of trade finance solutions like blockchain also helps to increase the velocity of trade, especially in situations like these where shipping routes are short, like the cross-border trade between Malaysia and Singapore.
Stuart Milne, Chief Executive Officer of HSBC Malaysia said that he is very pleased with the first project of HSBC Malaysia leveraging on blockchain LC transaction. Milne also believes that the whole event is a showcase of a strong commitment and ability of HSBC to support cross-border trade for Malaysian businesses using revolutionary technology platforms.
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Nurul is an English Language graduate who is highly passionate on writing, she literally breathes on it. An avid reader and a critical thinker, she covers on blockchain news during day and weeps at sad novels at night.