The central banks of Singapore and Hong Kong have announced that several banks around the world have already joined their newly formed Blockchain-based trade network called Hong Kong Trade Finance Platform (HKTFP).
The network is scheduled to be launched by early 2019.
Based on a report by the Business Times, there are more than 20 banks and financial institutions around the world that became new members of the network. The announcement of the new members was made during the Singapore Fintech Festival in mid-November 2017.
According to Hong Kong Monetary Authority (HKMA) chief executive officer (CEO), Norman Chan Tak-lam, the initiative is a “breakthrough” for Blockchain or distributed ledger technology (DLT).
“We firmly believe that the time has come for trade finance to move into the digital era.”
Brief profile of the HKTFP network
The HKTFP proof-of-concept, which is touted as a “global trade connectivity network” (GTCN), was developed by HKMA and the Monetary Authority of Singapore (MAS) with a goal to digitize trade finance through the use of Blockchain or DLT.
Based on the pronouncements by officials of the two monetary agencies, the DLT-based pilot program will track the global trade flows between Singapore and Hong Kong. The officials also claimed that the network will establish “new global standards” for the industry.
The need to regulate Blockchain
In his statement, HKMA executive director Li Shu-Pui claimed that financial regulators around the world should carefully study the possible drafting of regulations for DLT. This is because the technology is a new form of innovation in the “mission-critical” trade finance space. He also cited the concerns voiced out by a huge number of bankers on the issues of data and transaction privacy involving the technology.
Li also hinted that he believes that financial institutions in Europe will join the project as it progresses.