Blockchain Commercialization to Arrive in 2020, Claims HSBC Innovation Lead
The Global Commercial Banking Growth and Innovation Blockchain Lead of British multinational bank HSBC, Joshua Kroeker, has stated that he expects blockchain to be commercialized at an enterprise level in 2020.
Kroeker also stated that the biggest hurdle in this space is attracting more financial institutions, with clients needing to choose platforms that best address their needs.
HSBC Sees Bright Blockchain Future
Speaking to Tech Wire Asia, Kroeker described the problems surrounding blockchain adoption at an enterprise level and how it plans to address that. He sees HSBC looking forward to fostering a commercial level of adoption in the blockchain space.
Blockchain technology itself has a distinct appeal for incumbent players in all sorts of enterprise scenarios, not the least of which is banking. Kroeker alluded to this in the report:
“We know the technology works well and we’re extremely keen to see a shift from industry testing and learning to industry commercialization next year.”
Like many other banks and financial institutions around the world, HSBC is currently working on its own blockchain solutions, as is JP Morgan Chase. Banks see the technology as a way to enhance and streamline existing services while providing seamless settlements and trades.
#Blockchain technology has the potential to revolutionise #trade. Today we completed a trade transaction across two independently built blockchain platforms – merging the financial with the physical logistics of trade. We are #TransformingTrade. pic.twitter.com/ZIoamuWvtI
— HSBC (@HSBC) June 19, 2019
However, HSBC appears to be taking its blockchain efforts one step further, with the aim of connecting networks in various industries — not just finance. Kroeker said that HSBC would like to develop new use cases in the banking sector in addition to linking platforms outside banking by “helping partners and clients leapfrog the trial and error process.”
He also noted an increase in client demand for participation in transactions over a six to twelve-month period.
HSBC Devotes Resources
HSBC has already begun to pour a great deal of resources into developing blockchain solutions and related pilot programs.
#TransformingTrade through #blockchain increases transparency, reduces transaction times and improves working capital efficiency. HSBC’s Sunil Veetil speaks to CNBC about our most recent successful blockchain transaction. https://t.co/lFZY0udoOu
— HSBC (@HSBC) June 25, 2019
In September 2019, the bank completed the first yuan-denominated blockchain-based letter of credit transaction. The platform on which the transaction was made, Voltron, was developed by eight banks, including BNP Paribas and Standard Chartered. The transaction was completed in 24 hours, as opposed to the five-to-10 days it would otherwise take.
In May 2019, HSBC issued a letter of credit for US food and agriculture firm, Cargill, using blockchain technology. The bank used R3’s Corda platform, a blockchain solution for enterprises.
Images courtesy of Shutterstock, Twitter.
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