Australian wool exporter Fox & Lillie and HSBC say they have completed the first Voltron blockchain network transaction with a digitised letter of credit (L/C) between Australia and China for a wool shipment.

According to a statement issued by Fox & Lillie, the transaction brings the digitisation of trade another step closer to commercial reality.

The live transaction, completed in late March 2019, involved HSBC Australia's client Fox & Lillie sending a shipment of wool from Australia to China SDIC International Trade Nanjing (SDIC Trade Nanjing), a buyer and a client of HSBC China.

Digitised L/C

Using Voltron, a blockchain-based trade finance network, HSBC China issued a digitised L/C on behalf of SDIC Trade Nanjing.

Fox & Lillie then reviewed, verified and uploaded its own trade documents to the platform to complete the transaction.

HSBC comment

"This live deal between Australia and China builds on blockchain transactions that we have executed over the past year in a number of markets around the world, validating the commercial and operational viability of this solution," says HSBC Australia's head of global trade and receivables finance, Joseph Arena.

Around 43,000 L/Cs were issued into and out of Australia last year, underpinning US$42 billion of trade, according to the SWIFT electronic messaging service.

Bain & Company estimates that blockchain could increase global trade volumes by US$1.1 trillion by 2026, from the current base of US$16 trillion.

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