In order to move trade finance into the digital era, the HKMA, in collaboration with several local banks, completed a Proof-of-Concept (PoC) work on trade finance in March 2017.
Riding on the success of the PoC work, seven banks in Hong Kong decided to commercialise the prototype into production with a view to digitising paper-based documents and automating the trade finance process to reduce errors and risks of fraud. Under the facilitation of the HKMA, eTradeConnect, a blockchain-based trade finance platform fully funded by a consortium of major banks in Hong Kong, was officially launched in October 2018.
The HKMA signed and exchanged a Memorandum of Understanding (MoU) with the Monetary Authority of Singapore in November 2017 to jointly develop the Global Trade Connectivity Network (GTCN), a DLT-based cross-border open trade finance network between eTradeConnect and the Singapore Networked Trade Platform, to make cross-border trade and trade financing safer, more efficient and cost-effective. The GTCN is built on an open architecture so that other jurisdictions may join easily.
In October 2018, an MoU was also signed between eTradeConnect and we.trade, a European blockchain-based trade finance platform, to conduct a PoC on connecting the two platforms.
In November 2019, an MoU was signed between the subsidiaries of Hong Kong Interbank Clearing Limited (HKICL) and the Institute of Digital Currency of the People’s Bank of China (PBoC) to conduct a PoC on linking up eTradeConnect and the PBoC Trade Finance platform to provide firms in both Hong Kong and Mainland China with more convenient trade finance services. More information is available on the HKICL website (Chinese version).
This video gives an overview of eTradeConnect.