HSBC and Hang Seng Bank have partnered with two technology providers in Hong Kong to test how tokenised electronic bills of lading (eBLs) can accelerate trade finance payments and boost SME funding.
Alongside blockchain consortium Global Shipping Business Network (GSBN) and Ant Digital Technologies, the banks are members of a tokenisation project established by Hong Kong’s central bank earlier this year.
The Hong Kong Monetary Authority (HKMA) launched the initiative, known as Project Ensemble, in March to encourage the development of new financial market infrastructure, anticipating a future where real-world assets (RWAs), such as eBLs, carbon credits and green bonds, are tradable as digital commodities.
Last week, HKMA introduced a Project Ensemble sandbox that provides the banks with the digital infrastructure to run their tests.
In an interview with GTR, GSBN says a pilot is now underway involving HSBC, Hang Seng Bank and Ant Digital Technologies.
“The eBL is issued on the GSBN blockchain network but we are only a shipping supply chain network, we don’t do any financing. Effectively, what happens is the eBL is locked on GSBN, meaning nobody can exchange it, and on the Ant blockchain, a tokenised version of this locked eBL is issued. The tokenised version is on the Ant blockchain,” says Bertrand Chen, GSBN’s chief executive officer.
In the pilot, HSBC and Hang Seng exchange tokenised deposits – converting traditional bank deposits into tokens – while at the same time, exchanging the tokenised eBL to reflect the delivery of goods.
Chen says the pilot’s focus is on the use of tokenised eBLs to settle payments for trade transactions. While it involves tokenised bank deposits, rather than stablecoins, he notes “any crypto-based money is workable”.
“The eBL is secure on GSBN, and if, on the other side, Ant allows for the transaction to be facilitated on Ethereum, Solana or USDT, it works. This creates an interesting question: do you need a bank to facilitate the payment or could digital infrastructure – non Swift-based – be used?”
In a statement, GSBN says the tokenisation of the eBL will pave the way for the “securitisation of global physical shipping flows”.
“This can unlock alternative sources of finance and address the US$2.5tn global trade finance gap. The market for tokenised RWAs such as eBLs is estimated to reach $30.1tn by 2034, highlighting the huge opportunities ahead,” it says.
“We don’t know which investors would be interested in investing in tokenised eBLs…. But trade-based tokens are interesting and have certain properties. One of those is that it’s entirely uncorrelated from the stock market so there would be a lag effect if the stock market crashes,” Chen says.
He adds that eBLs could also be bundled together to form a “safe and diversified” pool for investors.
Though it is unlikely the Project Ensemble members will explore the financing benefits of tokenised eBLs, and are instead focusing on their role in innovating trade payments, he tells GTR
Broadly, it is hoped the adoption of eBLs will bring widespread benefits.
Moving from paper bills of lading to electronic equivalents could cut direct trade costs by US$6.5bn, boosting growth while reducing the industry’s carbon footprint, says the Digital Container Shipping Association (DCSA), whose members include several of the world’s largest container shipping companies.
eBL usage remains low, with just 2.1% of BLs and waybills for containerised trade issued electronically in 2022.
But last year, nine of the world’s major ocean carriers, representing nearly three-quarters of global containerised trade volumes, made a formal commitment to reach 100% usage of the eBL by 2030.
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