A group of leading banks, software firm R3, and finance technology specialist TradeIX announced that they are piloting a blockchain trade finance platform based on R3’s distributed ledger technology product Corda following “a successful proof-of-concept”.
A blockchain is a list of records (blocks) that is continuously growing.
It is part of an initiative called Marco Polo which has attracted interest from major banks including BNP, Commerzbank, ING, Standard Chartered, DNB, and OP Financial Group.
The technology “enables end-to-end, real-time, seamless connectivity between trade participants, eliminating the data silos which prevent free flow of information causing inefficiencies and discrepancies,” according to a press release.
The new platform is being touted as a way of simplifying paper processing across supply chain processes as well as making trade finance faster and more transparent for participants.
The solution is focused on risk mitigation by provision of payment commitments based on the matching of trade data, payables finance, and receivables finance.
“We see the proof-of-concept as an important milestone in this project,” said Jacques Levet, Head of Transaction Banking EMEA BNP Paribas. He added that the fact that more banks have joined also shows the interest in this project and in the potential of distributed ledger technology in supply chain finance solutions.
Nikolaus Giesbert, Divisional Board Member, Commerzbank AG, commented:
“We are one of the first three banks to successfully perform the proof-of-concept acceptance tests which is a major achievement for us. We are pleased with how far the development has come in such a short timespan. Together we have proved, that blockchain technology will make trade finance faster and more transparent for all participants,”
Ivar Wiersma, Head of Innovation ING Wholesale Banking, said:
“The tests ING ran as part of the proof-of-concept enabled us to see the value this solution could deliver in three separate areas of trade financing. The technology ran fast and smoothly and the positive results showed us we are on the right track and ready to take the next step by entering into a pilot,”