HSBC announced on Tuesday that it has completed its first Yuan-dominated blockchain-based letter of credit transaction.

HSBC, like its other competitors, has had its eyes on blockchain technology, to streamline the traditionally manual and bureaucratic way of financing trade. 

This deal is the first such transaction to use Yuan, which puts it a step forward in the use of Voltron trade finance platform, conjured by eight banks including Standard Chartered, BNP Paribas, and HSBC itself. 

As of now, transactions through this platform have mostly been individual pilot cases. Ajay Sharma, the regional head of global trade and receivables finance in HSBC Asia-Pacific, said that the advancement was being developed for a full proposition, and such that will be a commercially acceptable system for banks.

“We are hoping that we will have something by end of the year, maybe the first quarter of next year, where will we know from Voltron what it costs, at which point, a lot of banks who might be sitting on the sidelines will be able to make a decision,” he added. “Clearly we are hoping that through this technology, the unit cost of doing a transaction comes down, along with other benefits, such as speed.”

Citing SWIFT data, HSBC said that almost 1.2 million letters of credit and documents issued by the bank, worth USD750 were issued out of and into China alone in the year 2018.