GSBN Moves Into Trade Finance Products With Proofs Of Concept
Global Shipping Business Network (GSBN), a Hong Kong-based blockchain consortium, has completed the proof-of-concept stage for two trade finance products to connect the shipping and finance fields to promote end-to-end trade digitisation.
GSBN was formally incorporated in March 2021 by eight global shippers and port facilities – Cosco Shipping Lines, Cosco Shipping Lanes, Hapag-Lloyd, Hutchison Ports, OOCL, SPG Qingdao Port, PSA International, and Shanghai International Port Group – who along with accounting for one in every three containers managed in the world, according to GSBN.
The platform allows players to share shipment data and trade paperwork by utilising Oracle, Microsoft, AntChain, and Alibaba Cloud technologies. Cargo Release, the company’s first product, was established in July last year and is currently being developed in Europe. It enables clients to remove manual processes and eliminate the need for physical exchanges of cargo paperwork.
The two new trade finance instruments, open profile and letter of credit, rely on GSBN for reliable data from the shipping industry. Clients for an open account can instruct their bank to obtain a bill of lading data straight from GSBN’s blockchain-based network for their evidence of shipment. In the meantime, clients for the letter of credit can tell their bank to gather appropriate eBL information and instruct a title transfer using an online bill of lading (eBL) software built on GSBN’s system.
These are the first ideas to emerge from GSBN’s trade finance advisory committee, which it formed alongside the Bank of China, DBS, and HSBC in September of last year. As stated by GSBN, the group’s mission is to “explore the technical, legal, and regulatory frameworks required to breach the silos between the global market and financial institutions.”
According to the GSBN, breaking down silos among physical supply chains and the trade finance sector is crucial to enabling accessible, rapid, and equitable trade finance – especially for smaller global trade partners.
“Unless we use tools to reduce through the intricacies, the global trade financing gap will exceed US$2.5 trillion,” says GSBN CEO Bertrand Chen. “Reaching pieces of evidence for trade finance solutions demonstrates our commitment and momentum in developing scalable, real-world solutions to close this gap,” said the organisation.
According to the advisory committee, it will now look at conducting real-time customer pilots to test the new protocols.