Hong Kong uses blockchain to digitize shipping sector, strengthens CBDC testing

As Hong Kong continues to experiment with a central bank digital currency (CBDC), a nonprofit organization is gleaning the benefits of leveraging blockchain technology to improve the state of global shipping.

The plan includes using blockchain as the underlying technology for electronic bills of lading (eBL). Hong Kong-based non-profit organization Global Shipping Business Network (GSBN) revealed in mid-March that it had successfully completed a prototype eBL, earning praise from industry participants.

GSBN CEO Bertrand Chen said the prototype, developed in collaboration with Ant Group, has the potential to turn into an industry-wide eBL solution, given its wide reach and Hong Kong’s unique position as a major trade hub. I admitted something. The nonprofit organization is home to major shipping companies such as OOCL, Hapag-Lloyd (NASDAQ: HLAGF) and Cosco Shipping (NASDAQ: CHDGF), and remains keen to bring in other industry giants.

“Right now, I think there are probably only two places in the world where regulators have a plan or a vision for how to get this right,” Chen said. “I think it’s Hong Kong and Dubai.”

The Hong Kong Monetary Authority (HKMA) has added an eBL use case to its pilot.
Wholesale CBDC to show support for revolutionizing the shipping industry.

GSBN’s prototype includes using a third party, preferably a financial institution, to value and tokenize products, with Chen hinting at a clearer blueprint in the coming months. are doing. It is important to note that GSBN is not participating in his HKMA experiments, including his eBL, and is operated independently.

In 2023, GSBN rolled out eBL, but only 120,000 transactions were recorded at year-end. Chen said the nonprofit organization is confident of doubling the number of deployments by the end of 2024 due to rising digitalization trends.

Since the Middle Ages, baggage bills have been paper-based and have remained the same throughout the Industrial Revolution and the Internet Age. Previous attempts to digitize eBL have failed due to the lack of a uniform global standard, which is cited as the reason for relying on paper-based methods.

Hong Kong warmly embraces blockchain

While other jurisdictions continue to view blockchain with skepticism, Hong Kong
took a desperate stance on the technology and rolled out a series of initiatives to increase adoption numbers.

Leading the way in introducing comprehensive legislation to guide the activities of virtual currency service providers, the government lowered entry requirements for global Web3 companies. Several Web3 funds have been launched to support local businesses, and authorities have established a task force to promote blockchain adoption in the region.

“Subject to a balance between appropriate regulation and development promotion, Hong Kong will lead and promote innovative exploration and development, create more new application models, and bring together leading enterprises and talents in this field. We strive to build a thriving ecosystem,” said Treasury Secretary Paul Chen.

See: Find out how to use CBDC outside of digital currencies

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