Global Banks Test Blockchain Trade Financing with R3 Consortium
Including Barclays, BBVA, BNP Paribas, Danske, Intesa Sanpaolo, Nordea, Scotiabank, UBS, UniCredit and Wells Fargo.
It looks like the race to use blockchain technology for international trade financing is heating up today. Just hours ago Bank of America Merrill Lynch, HSBC and the Infocomm Development Authority of Singapore announced that they have developed a proof-of-concept pilot for the field.
Now the R3 consortium reveals that over fifteen of its members have completed two prototypes that demonstrate how distributed ledger technology can address the challenges facing the trade finance industry.
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The banking institutions involved in the trials R3 include: Barclays, BBVA, BNP Paribas, Commonwealth Bank of Australia, Danske Bank, ING Bank, Intesa Sanpaolo, Natixis, Nordea, Scotiabank, UBS, UniCredit, U.S. Bank and Wells Fargo. They designed smart contracts to process accounts receivable (AR) purchase transactions, also known as invoice financing or factoring, and letter of credit transactions.
R3 says its prototypes validate the technology as an alternative that is significantly faster, more reliable and cost-effective. It estimates that it can reduce operational and compliance costs of paper-based trade financing by 10 to 15% and provide a platform for banks to grow revenues by as much as 15%. The benefits include a reduction in fraud risk and removal of time-consuming reconciliation processes.
David Rutter, CEO of R3, comments: “Trade financing is a crucial income stream for banks and provides an integral role in enabling businesses in different countries to trade with each other with certainty and peace of mind. However, the processes used to facilitate trade financing have become antiquated and unfit for purpose in today’s increasingly digital world. These trials have proved that the blockchain-inspired technology used on our Corda platform holds the key to transforming trade financing for modern financial markets.”
It is so funny to see the corrupt banking giants flocking to R3 CEV and Hyperledger which are being managed by CEO of Digital Asset Holdings, Blythe Masters… These entities are doing nothing but cloning their own privately held blockchains that they can control from a top-down perspective and literally attempting to build a cage around the technology itself to lock the general public out unless you have been granted special access… In other words, corruption will carry on if something is not done to prevent these clowns from injecting this type of poison into the ecosystem infecting this phenomenal… Read more »