Hong Kong Central Bank, the Hong Kong Monetary Authority (HKMA) has announced that it plans to launch its own Blockchain trade finance solution. What is the key purpose behind this project?
17 July, AtoZ Markets – The central bank of Hong Kong has announced it will launch its own Blockchain trade finance solution with 21 banks in August.
The joint venture between the Chinese company Ping An Group’s fintech subsidiary OneConnect and the Hong Kong Monetary Authority is aimed to cut down the paperwork. It also plans to reduce the costs of security risks for participants.
Hong Kong Central Bank to Launch Blockchain Trade Finance Solution
The primary goal of the scheme is to reduce the amount of time and bureaucracy that is existent in the process of signing up new inexperienced firms to banking services. The scheme plans to do so by organizing the transaction process.
According to some of the online reports, “some” transactions will be able to be processed in just one day using Blockchain. This is in comparison to fourteen days through current methods.
Hong Kong Will not Issue CBDC
This step from Hong Kong’s central bank has been initially announced back in November 2017. The move marks the first instance of a regulatory authority “bringing banks together” with the aim to improve trade finance. Ping An deputy chief executive Jessica Tan has commented on the development:
“Instead of individual banks trying to do this you have the regulator trying to bring the banks together.”
Earlier this May, the financial regulator of Hong Kong markets and the central bank of the country, the Hong Kong Monetary Authority (HKMA) has made an announcement that it has no plans to issue a central bank digital currency (CBDC).
That time, Joseph Chan, Acting Secretary for Financial Services and the Treasury, has attended a council meeting with legislators in Hong Kong. He has stated that HKMA’s research on the topic has brought a belief that CBDC would not be as useful in Hong Kong as it is in other jurisdictions.
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