HSBC Enacts First Letter of Credit on a Blockchain in Malaysia

Published at: Oct. 16, 2019

Major bank HSBC has announced the successful enactment of a letter of credit (LC) on a blockchain in Malaysia.

The transaction

English language local fintech news outlet Fintech News Malaysia reported the development on Oct. 14, noting that the transaction involved packaging firm Simply Packaging importing resin from an unspecified Singaporean chemicals company. The issuing bank was HSBC Malaysia and the nominated bank was HSBC Singapore.

Per the report, this is the eleventh blockchain-powered transaction carried out by HSBC and the first such pilot carried by its Malaysian branch. HSBC Malaysia CEO Stuart Milne commented on the successful test:

“I am very pleased that HSBC has pioneered Malaysia’s first pilot blockchain LC transaction. This showcases our strong commitment and ability to support cross-border trade by Malaysian businesses using cutting-edge technology platforms.”

HSBC’s involvement with blockchain

According to the article, trade between Malaysia and Singapore was worth over $85 billion last year and the administrative paperwork often delays the delivery of goods traveling across this trade route. The exchange and processing of the documents involved in reportedly take five to 10 days on average, while the pilot managed to cut the time to 24 hours.

As Cointelegraph reported in September, at the time HSBC has completed the first yuan-denominated letter of credit transaction on a blockchain using the Voltron trade finance platform.

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