Bitcoin Hot News
A group of seven large European banks has signed a memorandum of understanding (MoU)
to develop a blockchain-
The participating banks are UK-
Aimed at bettering domestic and cross-
Based on a prototype solution developed by one of participating Belgium-
The Blockchain Solution
With an intent to simplify trade finance, the Digital Trade Chain will look toward the efficient management and securement of domestic and international trade transactions in Europe among small and medium enterprises (SMEs). In essence, the distributed ledger will record, track and secure transactions by connecting all participants – the buyer and seller, their individual banks and the logistics transporter, among others – digitally via an online interface and mobile applications.
The focus on SMEs is due to their preference of a more straightforward trading process
of open account solutions wherein the product is shipped and delivered before a payment
is due. Payment in this form of trade finance is typically in a one-
The DTC will help enable end-
Trade Finance and the Blockchain Tide
While proponents of blockchain technology see the innovation triggering a systemic
upheaval of the financial industry, the trade finance sector, in particular, could
become one of the earliest benefactors of the disruptive technology. Current industry
processes are plagued by inefficiencies due to a significant manual element of oversight
that can be erroneous and time-
Globally, reduced counterparty risk, improved operational efficiency with enhanced
transparency will prove beneficial for global trade as well as auditors, looking
into transactions that make for the $4 trillion trade-
In September 2016, the export of a $100,000 shipment of cheese and butter from Ireland to the Seychelles laid claim for the first global trade finance transaction using blockchain technology. The same month saw tech giant Microsoft reveal its intention to “fuel transformation of trade finance transacting” in collaboration with Bank of America, with blockchain technology.
Earlier, the R3 banking consortium revealed its development of two blockchain prototypes to enhance the global trade finance industry. 15 member banks participated, with trade finance described as “a crucial income stream for banks” by R3 CEO David Rutter.