As Hong Kong continues to experiment with a central bank digital currency (CBDC), a non-profit organization is gathering benefits to improve the state of global shipping with blockchain technology.
The plan includes the use of blockchain as the underlying technology for electronic bills of lading (eBL). Hong Kong-based non-profit organization Global Shipping Business Network (GSBN) announced in mid-March that it had successfully completed a prototype of the eBL, drawing praise from industry stakeholders.
GSBN CEO Bertrand Chen confirmed that the prototype, developed in collaboration with Ant Group, could transform into an industry-wide eBL solution, given Hong Kong’s wide reach and unique position as a leading trading hub. The non-profit organization has major shipping players in its ranks, including OOCL, Hapag-Lloyd (NASDAQ: HLAGF) and Cosco Shipping (NASDAQ: CHDGF), and continues to welcome other industry giants on board.
“I think there are probably only two places in the world right now where the regulators have a plan or a vision for how to do this well,” Chen said. “And I think it’s Hong Kong and Dubai.”
The Hong Kong Monetary Authority (HKMA) has added an eBL use case for a
wholesale CBDC as a statement of support for a revolution in the shipping sector.
GSBN’s prototype involves using a third party to value and tokenize the goods, preferably a financial institution, with Chen hinting at a clearer blueprint in the coming months. It is important to note that GSBN is not participating in the HKMA’s experiment with eBLs, but is operating independently.
In 2023, GSBN rolled out an eBL, which recorded only 120,000 transactions at the end of the year. Chen says the nonprofit is confident of doubling adoption rates before the end of 2024, spurred by the growing digitalization trend.
Since the Middle Ages, bills of lading have been paper-based and have remained unchanged through the Industrial Revolution and the Internet age. Previous attempts to digitize eBLs have failed due to the lack of uniform global standards, which are cited as a reason for the dependence on paper-based methods.
Hong Kong wholeheartedly embraces blockchain
While other jurisdictions continue to view blockchain with skepticism, Hong Kong has
took a fierce stance on the technology and launched a wave of initiatives to increase adoption rates.
Guided by the introduction of comprehensive legislation to guide the activities of virtual currency service providers, the government has lowered the entry requirement for global Web3 companies. Several Web3 funds have been launched to support local businesses, with authorities setting up a task force to promote blockchain adoption in the region.
“Based on a balance between appropriate regulation and promoting development, Hong Kong seeks to lead innovative exploration and development, create more new application models and strive to bring together top companies and talent in the arena to create a thriving ecosystem to build. said Treasury Secretary Paul Chen.