Blockchain has continued to gain new converts every day and the latest of them is in India where oil and gas megabucks company - Reliance Industries, has made a landmark move towards the technology.
HSBC India revealed that RI, owned by India’s richest man, Mukesh Ambani, has used blockchain to complete its first trade finance transaction. The trial was conducted in partnership with US-based Tricor Energy and will obviously be the first of many more to come.
Insights provided by the publication showed that the transaction was carried out on enterprise blockchain R3 Corda and a platform provided by Bolero International, another startup working on trade finance digitization.
HSBC India and Brussel-based ING Bank were named as the other parties on the network while Reliance Industries used the blockchain platform to issue and manage an electronic bill of lading or cargo for shipment.
First, the ING bank issued a letter of credit on behalf of Tricon Energy USA, the firm which sent the shipment to Reliance Industries, the export location. Then, HSBC India served as the advisory and negotiating bank for Reliance Industries during the transaction.
A Major Headway For Trade Digitization
The milestone reached by Mukesh Ambani’s Reliance Industries is another credit to the revolutionary power of blockchain technology.
Before now, foreign and home traders used a paper-based letter of credit to carry out transactions, leading to slow transaction time and increase in costs of sending shipments to customers.
Speaking in the release, Srikanth Venkatachari, the joint chief financial officer at Reliance Industries confirmed that with blockchain at the helm, both limitations to trade financing has been massively reduced.
"The use of blockchain offers significant potential to reduce the timelines involved in the exchange of export documentation from the extent 7 to 10 days to less than a day," he said.
Aside from reducing transaction times and lower cost, blockchain technology has more potential and is expected to play a bigger role in cross-border trades in the near future. Reliance Industries has just gotten on the right path and will likely lead India’s trade industry with the billionaire owner in charge.