It is said that the bank has been looking to use digital ledger technology, or blockchain, to make the business of financing trade more efficient.
The first transaction of its kind to implement renminbi, HSBC is using the Voltron trade finance platform, which is developed by eight banks including the likes of BNP Paribas, Natwest and Standard Chartered.
HSBC said that 1.2 million letters of credit, documents issued by a bank guaranteeing a buyer’s payment to a seller, worth $750bn were issued into and out of China alone in 2018.
This involved the cross-border transaction of Hong Kong-based electronics manufacturer MTC Electronics exporting a shipment of LCD products to its parent firm Shenzhen MTC.
The blockchain platform enabled the parties to exchange electronic documents in 24 hours instead of the regular five to ten days required for traditional document exchanges, the bank said.