The Trade Finance Advisory Group at Global Shipping Business Network (GSBN) has developed its first blockchain-enabled proofs-of-concepts for two trade finance products, letters of credit (L/Cs) and open account.

GSBN is an independent, not-for-profit technology consortium comprised of Bank of China (Hong Kong) Limited, DBS Bank and HSBC, that was established to build a blockchain-enabled operating system for global trade.

L/Cs and open account

For L/C transactions, applicants can authorise their bank to use an electronic bill of lading (eBL) application built on GSBN's platform to acquire relevant eBL information and instruct a title transfer.

Open account applicants meanwhile can authorise their bank to directly inquire bill of lading data via GSBN's blockchain-enabled platform for their proof of shipment.

The two trade finance products harness trusted data direct from the shipping industry via GSBN.

Digital benefits

For small- and medium-sized enterprises, these digitally enabled solutions enable accessible, fast and equitable access to trade finance according to GSBN.

It says that for financial institutions, this translates into better risk management, cost efficiencies and an overall improved customer experience.

Long-term vision

Trade finance solutions are among the first banking focused solutions under development in GSBN's growing suite of products.

The consortium has the long-term vision of integrating all products including its shipping product, Cargo Release, which cuts the time for cargo to be document-ready for release from days to hours, on its blockchain-enabled platform to deliver a one stop and unified user experience.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.