Eddie Yue: Connecting the digital islands - next steps in trade finance Opening remarks by Mr Eddie Yue, Chief Executive of the Hong Kong Monetary Authority, at the roundtable on “The Future of Trade Finance: Opportunities for Hong Kong, Asia and the World”, co-organised by the University of Hong Kong (HKU) Asia Global Institute & International Chamber of Commerce, Hong Kong, 26 January 2022. * * * 1. Good afternoon everyone. Thank you, Dr Fung, for inviting me to speak, and the HKMA is very pleased to support today’s event. It would have been a pleasure to meet you all in person, but I am thankful that this event could go ahead as planned. 2. Today’s topic is the future of trade finance, and I believe we all agree that, to elevate global trade finance to the next level, the recurring pain points of the existing trade finance system need to be fixed. The issues—including a paper-based system that is inefficient, prone to fraud and human error—have been discussed many times; so I believe by now, we all have a basic understanding of the problems. Indeed, various stakeholders, including the HKMA, have been attempting to solve the pain points by using emerging technologies. 3. For example, in 2018, the HKMA facilitated the launch of eTradeConnect, which is a blockchain-based platform that aims to digitise paper based documents and automate the trade finance process. The platform was subsequently connected to a similar platform built by the People’s Bank of China to facilitate cross-boundary trade finance processes.
The geographical proximity and cultural similarities have been reinforced by the diverse strengths that exists in the region. These factors have been important in enhancing the integration process. As this greater regional economic and financial integration is advanced, it will serve as a powerful catalyst for the future expansion of intra-regional trade and investment, creating a self-sustaining and mutually reinforcing economic growth in the New Nusantara region. Ladies and gentlemen: It is my pleasure today to speak on the potential role of an integrated economic and financial platform within the Nusantara region, a region of rapid economic growth in which almost 300 million Muslims resides. My remarks will focus on the potential generated by a collaborative platform and the significance of building linkages between the Nusantara region with other parts of the world. The region's current economic progress, prosperity and financial stability has now accorded us a new strategic window of opportunity to develop new value propositions to unleash the full potential accorded by the accelerating economic and financial integration process. There are already encouraging formal and informal inter linkages between our respective financial markets as well as a higher level of engagement between the respective corporate communities, the market participants and the authorities. A collaborative platform that is based on the diverse comparative advantages of the Nusantara economies can benefit from the complementarities between our respective economies. Essentially, these opportunities will increase the potential to expand markets, increase products lines and deepen the research and development capabilities.