"The need for paper reconciliation is eliminated as all parties are linked to the platform and updates are made immediately," said Vivek Ramachandran, HSBC's Head of Growth and Innovation, in a statement. "The quick turnaround could mean the release of liquidity for businesses."
HSBC and ING said that the exchange took place within 24 hours compared to the five to ten days normally required for sharing through a paper-based system
Blockchain advocates claim they have the potential to turn different industries upside down. Sectors such as trade finance, health care and insurance are seen as good targets for the use of technology as they are based on long paper routes.
While there were proof-of-concept transactions using blockchain technology, HSBC was the first to have commercial applications, a CNBC spokesman said.
Banks have poured money into blockchain projects as it is believed that the technology will significantly disrupt financial services. The use of Blockchain to support cryptocurrency transactions is considered by many to be feasible for the technology, […] […] because large amounts of data can be processed in a transparent, fixed network.
Last month, Santander partnered with blockchain company Ripple Foreign Exchange Service, which enables same day international money transfers.