Blockchain Technology steps into India with Reliance Industries

Blockchain Technology steps into India with Reliance Industries

Gas and Oil Reliance Industries owned by India’s richest and business magnet Mukesh Ambani conducted his first trade finance transaction through blockchain.

According to a news release, recently Reliance Industries conducted a live blockchain trade finance transaction in association with US-based global chemical trader Tricon Energy.

For readers who don’t know about the technology, a blockchain is an online ledger that uses a data structure to simplify the way we conduct a transaction. Blockchain allows users to make changes in the ledger in a secure way without the help of a third party.

A bank’s ledger is connected to a centralized network. A blockchain is anonymous, it protects the identities of the users who conduct transaction on the blockchain. This makes blockchain a very secure way to carry out financial transactions. The algorithm used in blockchain reduces the dependence on the third party to verify the transactions. This technology is used for keeping the record of various transactions. This technology has the potential to disrupt the financial system.

Sunny Ray, Co-founder and President of India’s bitcoin blockchain company, Unocoin says, “blockchain enables two parties that do not know each other to agree that something is true without the need of a third party. As without the need of writing entries into a single sheet of paper, a blockchain is a distributed database that takes a number of inputs and places them into a block. Each block is then linked to the next block using a cryptographic signature. This allows blockchains to be used as a ledger which is accessible by anyone with permission to do so.”

The recent release adds that the end-to-end transaction was assisted by banking majors HSBC INDIA and ING Bank, Brussels, and carried out on enterprise association R3’s Corda.

U.K. based trade finance digitization firm Bolero International provided the platform with an integration with Corda platform. After the transaction, it issued them an electronic bill of the lading.

The release explains about a letter of credit that was issued by the ING Bank for US based Tricon Energy ( the importer) with HSBC INDIA as the negotiating bank for Reliance Industries, India ( the exporter). A letter of credit is a bank’s guarantee for the buyer’s payment to the seller.

Hitendra Dave, HSBC INDIA’s head for global banking and markets said:
“The use of blockchain technology is a significant step towards digitising trade. The overall efficiency it brings to trade finance ensures low cost, quicker turnaround and potentially unlocks liquidity for businesses.”

These days the importers and exporters still use paper-based letters for credit with each party sending and receiving documents either by post or fax. The blockchain technology trade finance platform is aimed to digitise that process, it saves time and cost.

“The use of blockchain offers significant potential to save the time involved in exchange of documentation from between the parties ,” said Srikanth Venkatachari, joint chief financial officer at Reliance Industries

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