Singapore's Monetary Authority and Hong Kong's Monetary Authority are building a cross-border blockchain platform for trade finance. The project aims to eliminate fraud and errors in a system built on
Singapore's Monetary Authority and Hong Kong's Monetary Authority are building a cross-border blockchain platform for trade finance. The project aims to eliminate fraud and errors in a system built on paper documents.
The platform marks their first major collaboration under a fintech cooperation agreement signed this week. Seven Hong Kong banks are moving to commercialize what had been a proof-of-concept into a production system called the Hong Kong Trade Finance Platform (HKTFP). The system digitizes trade documents, automates workflows, and cuts fraud risk.
Under the new agreement, the HKTFP will connect to a similar platform Singapore is constructing. The two authorities said they would release more details in the coming weeks.
Norman Chan runs the HKMA. Speaking at Fintech Day, where the agreement was announced, he described the project as a global first. "This interface is likely to be the first of its kind in the world in the application of blockchain technology (DLT) in solving the century-old problem arising from the inefficiency of the paper-based trade finance system," Chan said.
He positioned blockchain as a defining force for banks. "Technology is a game changer for the future of banking and payment services. It will differentiate winners from losers. I am very pleased to say that Hong Kong has made important progress in cross-border collaboration and the research on DLT applications. The collaborative efforts and enhanced research and talent development are the essential building blocks to facilitate financial innovation."
The cooperation agreement commits both authorities to work on joint fintech projects, facilitate referrals of innovative businesses, share information, and exchange expertise. Chan said the partnership would "create significant synergy for the development of fintech and more efficient fund flows between the two markets."
HKMA also announced other initiatives at Fintech Day. The authorities are developing working guidelines for banks that use blockchain technology. A $7 million fintech award will recognize outstanding startups.
MAS has pursued fintech cooperation with multiple regulators elsewhere. The Singapore authority has signed similar agreements with regulators from the UK, Australia, Switzerland, South Korea, Japan, and France. The Hong Kong partnership continues this pattern.
