Banking giants Bank of America and HSBC have teamed up with the Singapore government’s IT and telecom agency on a project that applies blockchain to trade finance.
Bank of America, HSBC and the Infocomm Development Authority of Singapore (IDA) revealed they have built a blockchain application based on the Hyperledger protocol that aims to replicate the letter of credit (LC) transaction process between banks, exporters and importers.
The trial finds the financial firms seeking to explore how a distributed ledger could establish trust between parties that today need to rely on banks to issue and recognize paper documents as a means of facilitating trade.
According to International Business Times, the proof-of-concept involves a seven-step process that showcases how a distributed-ledger system can be used for data authentication.
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