Another two banks have entered the blockchain arena, though this time for a slightly different solution than we’ve become accustomed to hearing.
The bulk of blockchain development efforts to date have been focused on streamlining securities settlement and cross-border payments. One of the latest efforts aims to solve the headaches associated with trade finance, particularly in the busy import/export markets of Asia.
According to The Straits Times, citing Bloomberg, Standard Chartered has teamed up with The Development Bank of Singapore (DBS). They have developed a distributed ledger system that will speed up transactions, reduce costs and boost the transparency of international trade.
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Traditionally, the business is highly paper-intensive, and can involve a plethora of parties including importers, exporters, financiers, insurers and export credit rating agencies. So in addition to streamlining payments, an ideal solution would also integrate additional elements of record immutability and transparency.
Slowing economic growth in China and a slump in commodity prices have reportedly hurt trade finance operations in the region. The envisioned cost savings can have a meaningful impact on margins.
The two banks have completed tests and plan to collaborate with other companies next year, bank representatives reportedly said.
By now, the majority of the world’s largest banks have become active in the blockchain space, performing their own blockchain development or joining consortiums- or both.