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Hong Kong and Singapore have committed to work on a strategic project on trade finance cross-border infrastructure, based on distributed ledger technology (DLT).
The Hong Kong Monetary Authority (HKMA) and The Monetary Authority of Singapore (MAS) are planning to work together on trade finance cross-border infrastructure, based on distributed ledger technology (DLT), Reuters reports. This project already involves seven Hong Kong-based banks.
It is designed to digitize trade documents and reduce risk, potential fraud and errors in the multi-trillion-dollar funding of international trade. Ultimately, the authorities plan the creation of a cross-border infrastructure that would serve as a bridge between two cities. It is their first collaborative initiative. MAS and HKMA signed an agreement to develop and strengthen co-operation on this FinTech. This agreement was exchanged on 25 October 2017, at the FinTech Day organised by the HKMA.
Mr. Ravi Menon, Managing Director of MAS, stated:
“MAS is delighted to embark on this FinTech partnership with Hong Kong. This is one of our more significant FinTech co-operation agreements, given the extensive financial and trade linkages between Singapore and Hong Kong. We are especially pleased that we have a live project to enhance the trade finance corridor between the two financial centres.”
Mr. Norman Chan, Chief Executive of the HKMA, said:
“Hong Kong and Singapore are the two leading international financial centres in the region and are actively deploying FinTech. Collaboration between the HKMA and MAS will create significant synergy for the development of fintech and more efficient fund flows between the two markets. We firmly believe that the time has come for trade finance to move into the digital era.”
It is necessary to add that since last year, MAS has signed several agreements with overseas financial regulators for cooperation on the development of FinTech, including with the Financial Conduct Authority, UK, Australian Securities and Investments Commission, Swiss Financial Market Supervisory Authority, Korean Financial Services Commission, etc. Also MAS has partnered with the Danish Financial Supervisory Authority (Danish FSA) to help fintech companies enter each other’s markets.
In September the People’s Bank of China announced its decision to introduce a complete ban on Initial Coin Offerings (ICOs). But then the information about the fact that ICOs ban is temporary appeared. It is necessary to note that during this situation with China, Singapore was likely to become favored ICO destination for blockchain startups. A number of factors such as tax-friendly regulations, light-touch rules, and state funding allowed the city-state to be a hub for startups and a place where a number of successful ICOs were held in the past. Now these two countries are united for the collaboration in blockchain field.