As Hong Kong continues its experimentation with a central bank digital currency (CBDC), one non-profit is gleaning upsides for improving the state of global shipping with blockchain technology.
The plan involves using blockchain as the underlying technology for electronic bills of lading (eBL). Hong Kong-based non-profit Global Shipping Business Network (GSBN) disclosed that it had successfully completed a prototype eBL in mid-March, earning 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 its wide reach and Hong Kong’s unique position as a leading trade hub. The non-profit has key shipping players in its ranks, including OOCL, Hapag-Lloyd (NASDAQ: HLAGF), and Cosco Shipping (NASDAQ: CHDGF), and it remains keen on onboarding other industry giants.
“I think right now in the world, there’s probably only two locations where the regulators somewhat have a plan or vision of how to do this right,” said Chen. “And I think it’s Hong Kong and Dubai.”
The Hong Kong Monetary Authority (HKMA) added an eBL use case in the pilot for a
wholesale CBDC in a show of support for revolutionizing the shipping industry.
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 does not participate in the HKMA’s experiment involving eBLs but operates independently.
In 2023, GSBN rolled out an eBL, recording only 120,000 transactions at the close of the year. Chen says the non-profit is confident of doubling the adoption numbers before the end of 2024, spurred by the growing digitization trend.
Since the Middle Ages, bills of laden have been paper-based and remained unchanged through the Industrial Revolution and the Internet era. Previous attempts to digitize eBLs have fallen short due to the lack of uniform global standards, which are cited as a reason for the reliance on paper-based methods.
Hong Kong warmly embraces blockchain
While other jurisdictions continue to eye blockchain with skepticism, Hong Kong has
adopted a frantic stance for the technology, rolling out a wave of initiatives to boost adoption figures.
Led 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 firms. Several Web3 funds have been launched to support local firms, with authorities establishing a task force to promote blockchain adoption in the region.
“Premised on a balance between appropriate regulation and promoting development, Hong Kong seeks to lead and drive innovative exploration and development, create more new application models, and strives to draw together top-notch companies and talent in the arena to build a thriving ecosystem,” said Financial Secretary Paul Chen.