HSBC seeks Korean banks for blockchain ties - The Korea Times
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HSBC seeks Korean banks for blockchain ties

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Joshua Kroeker, HSBC's innovation director, holds a press conference at HSBC Korea in Seoul, Tuesday. Courtesy of HSBC Korea
Joshua Kroeker, HSBC's innovation director, holds a press conference at HSBC Korea in Seoul, Tuesday. Courtesy of HSBC Korea

By Park Hyong-ki

HSBC is seeking to forge ties with local banks to launch a blockchain platform enabling companies to process and settle their invoices for trade efficiently, the global bank said Tuesday.

It is looking to commercially launch the Voltron platform, which is in a pilot stage, in the near future as the bank expands its alliances with other banks and tech companies, said Joshua Kroeker, HSBC's innovation director on blockchain.

Voltron began as a project within the R3 blockchain consortium to help resolve an issue concerning the long process of paper-based letters of credit exchanged between importers and exporters, and other parties including shipping companies and banks.

It normally takes about five to 10 business days, or as long as 30 days to file and process those documentary trade papers.

Through a decentralized ledger system, the platform can help traders to reduce the time to 24 hours as blockchain will enable multiple parties to see the whole process and data at the same time.

It will remove any friction hindering rapid trade financing.

"The biggest impact would be time. Time and transparency will help companies better manage their cash flow and working capital," Kroeker told the press in Seoul.

"I am here this week to reach out to Korean banks to collaborate on this blockchain platform for letters of credit."

HSBC is seeking to establish ties with banks that will be committed to building a successful platform and providing useful and easy applications by sharing costs.

HSBC said it will not be the owner of the platform; a joint venture or a cooperative will manage and govern it.

HSBC has partnerships with seven financial companies for Voltron. They are Bangkok Bank, BNP Paribas, CTBC Holding, ING, NatWest, SEB and Standard Chartered.

All blockchain trade networks that HSBC are engaged in are based on "permissioned" blockchain technology.

This means the platform will only be opened to and shared with validated participants on a need-to-know basis instead of broadcasting every piece of data to the entire network, according to HSBC.

Park Hyong-ki

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