Hong Kong could create a commercial financing system with Blockchain

James Henry Lau, Secretary of Financial Services and Treasury of Hong Kong, said in a forum last Friday that the institution was examining Blockchain technology in the context of a commercial financing system. Distributed accounting technology (DLT) could be advantageous in the regions that participate in China's Belt and Road development strategy.

China proposed the Belt and Road Initiative (BRI) in an effort to create the conditions for collaboration with the Silk Road Economic Belt (SREB), Russian Maritime Silk (MSR) and other Chinese partners. Currently, the initiative links 69 countries, with China serving as its commercial center. The strategy aims to make China a leading actor in global affairs.

President Xi Jinping initially announced the BRI in 2013. For his part, in September this year the Hong Kong Monetary Authority revealed its plans to make capital investments in several BRI projects. In this sense, Henry Lau said:

Given that trade within the BRI network mainly involves small and medium enterprises, Blockchain is the ideal technology given its potential to eliminate intermediaries and central authorizations.
As a distributed accounting system, the technology will allow automatic registration of all transactions within the network, and will allow all parties involved to track them. In addition, Blockchain can reduce the number of intermediaries, accelerate the process and increase security, making fraud almost impossible.

This movement in the context of the BRI project would not be the first initiative related to Blockchain in this territory. Recently, the Hong Kong Monetary Authority successfully implemented DLT technology on a platform designed to digitize contracts. The central bank worked with Deloitte and six lenders, including the Bank of China and the Bank of East Asia.