R3, TradeIX and a Dozen Global Banks to Streamline Open Account Trade Finance

R3 and trade finance technology firm TradeIX today announced a joint initiative for the overhaul of the open account trade finance infrastructure using Blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Read this Term technology. It encompasses twelve banks including Bangkok Bank, Barclays, BBVA, Bladex, BNP Paribas, Commerzbank, CTBC Bank, ING, Intesa Sanpaolo, Shinhan Bank, Royal Bank of Scotland and Wells Fargo.

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The group is developing an end-to-end open account trade finance business network which will be powered by TradeIX and R3’s Corda distributed ledger platform. The initial development phase involves creating standard trade finance smart contracts on a DLT infrastructure.

David Rutter, CEO of R3, commented: “Earlier this year R3, TradeIX and a core group of R3 members teamed up to redesign the infrastructure behind open account trade finance utilising our Corda platform and the TIX-Platform of TradeIX. Existing trade finance infrastructure is in serious need of an upgrade, and this project is a big step towards the adoption of reliable, efficient and standardized processes for the entire sector.”

Rob Barnes, CEO of TradeIX, said: “The business network provides the entire trade ecosystem with a smarter, more secure, and more transparent infrastructure that connects currently siloed parties and systems, standardizes and digitizes trade documents, data, and assets enables the convergence of trade data from physical, informational, and financial supply chains. This provides trading parties secure, easy access to rich, verified trade data, APIs, and powerful technology applications that will drive a paradigm shift in open-account trade finance.”

Ivar Wiersma, Head of Innovation Wholesale Banking at ING, noted: “In order to address emerging needs in trade finance, ING, R3 and other key members have come together to launch this initiative for open-account trade finance which enables flexible and efficient working capital finance solutions for our clients. As a member of R3 it is very rewarding to be part of this ground-breaking initiative.”

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“We see this initiative as complementary with other initiatives and trade platforms. Building smart contracts to capture the SCF business logic on DLT is an essential step that will significantly boost the trade finance ecosystem. This consortium with R3 provides an excellent opportunity to work on this collaboratively,” said Marguerite Burghardt, Global Head of the Trade Competence Center at BNP Paribas.

“We are very excited about this new initiative, which has the potential to significantly boost the trade finance ecosystem,” said Bernd Laber, Group Executive Trade Finance & Cash Management Corporate Clients at Commerzbank. “This collaboration is our ongoing effort to constantly innovate the marketplace, whilst at the same time exploring cutting-edge technologies. Together with R3, other bank members and TradeIX, we aim to bring trade and supply chain finance business to the next evolutionary stage.”

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R3 also announced that the International Trade and Forfaiting Association (ITFA) is joining the R3 network and will be involved in this project and others. ITFA is a global association for the trade receivables and supply chain finance industry, with over 170 members.

Sean Edwards, Chairman of the ITFA, commented: “We look forward to working with R3 and its members as an observer and adviser on this project as distributed ledger technology looks to change the way that world trade, and particularly receivables finance, is conducted. The digitisation of traditional trade payment instruments is a key step in modernising trade finance.”