The British banking giant HSBC would execute the first financial transaction abroad of Reliance Industries (RIL) to a customer based in the United States using blockchain technology.
"The use of Blockchain offers significant potential"
Despite the tension surrounding cryptocurrencies in India, HSBC presumably made the first financial transaction abroad using blockchain-based technology. The parties involved are India Reliance Industries – the second largest listed organization in the country – and a US-based company, Tricon Energy.
According to local media The Times of India, the transaction included a blockchain-enabled credit letter (LoC) that successfully facilitated a shipment between the two companies.
Speaking on the matter was the Chief Financial Officer of RIL Srikanth Venkatachari, who noted:
The use of blockchain offers significant potential to reduce the timing involved in exchanging export documentation from seven to ten days in less than a day.
Swimming against the tide
It is interesting to note that the transaction took place in periods of substantial tension in the field of cryptocurrency. The Reserve Bank of the country has submitted an official communication to all banks to stop operations with activities related to cryptocurrency at the beginning of the year.
Bitcoinist reported on October 24 that local Bengaluru authorities seized the first Bitcoin (BTC) [coinprice] ATM to be illegally installed by UnoCoin – the oldest Indian cryptocurrency bag. Both co-founders were put behind bars.
However, the Supreme Court of India continued to set an official two-week deadline for the government to clarify its position on cryptocurrencies.
It is questionable, however, whether the actions of HSBC to carry out a financial transaction using blockchain technologies are in violation of the current position of the country as no cryptocurrencies have been involved. At the same time, it clearly outlines the benefits of fairly nascent technology and its application in real financial transactions.
What do you think of HSBC's move to execute a financial transaction using blockchain technology in India? Do not hesitate to let us know in the comments below.