First cross-border RMB-denominated blockchain-based Letter of Credit transaction in the world
We assisted Shenzhen MTC Co., Ltd (Shenzhen MTC) to complete the world’s first cross-border RMB-denominated blockchain-based Letter of Credit (“LC”) transaction. This is also the first blockchain LC in which both clients are based in the Guangdong-Hong Kong-Macao Greater Bay Area (GBA).
The live transaction involved Hong Kong-based MTC Electronic Co Limited (MTC) exporting a shipment of raw materials to its Shenzhen-based parent company (Shenzhen MTC). Using Voltron, a shared blockchain platform co-founded by 8 member banks globally, HSBC Shenzhen Branch issued a digitized LC on behalf of Shenzhen MTC to MTC. HSBC Hong Kong, on behalf of MTC, then reviewed, verified and uploaded required trade documents to the platform to complete the transaction within 24 hours. In contrast, the same process used to take 5 to 10 days by using paper-based documents. The use of digital technologies is making trade finance transactions simpler, faster, safer and more transparent.
The transaction marks the latest milestone in HSBC’s efforts to contribute to RMB internationalization by using fintech. It also demonstrates the Bank’s advantage as a leader in serving trade flows and corporates in the GBA.