BBVA is Using Blockchain to Streamline International Trade Transactions
- The blockchain-based system reduces document verification time to 2.5 hours from 7-10 days.
Spain’s second-largest lender, BBVA, in collaboration with Wave, has launched a 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 tampe 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 tampe Read this Term-based pilot program to automate document presentation in import-export operations between Spain and Latin America.
The efficiency of blockchain technology reduces the sending, verification, and authorization of foreign trade transaction time from 7-10 days to a mere 2.5 hours.
Under the pilot program, a real sale operation was conducted between Mexico and Spain, in which a company named Frime, located in Barcelona, purchased more than 25 tons of frozen tuna from Pinsa Congelados, a Mazatlán company (Mexico). The operation was carried out through a letter of credit, the most traditional payment system in international trade operations, issued by BBVA Spain and paid by BBVA Bancomer.
As explained by the financial institution, the large amount of documentation required by a letter of credit involves a series of processes that in most cases involve manual checks and the sending of physical documents. When unavoidable errors are taken into account, this process can extend to almost two weeks.
BBVA’s global trade and international banking head, Patxi Fernández de Trocóniz, said: “The pilot we carried out with Wave represents a leap forward in improving the efficiency of international trade transactions. The time it takes to manage the documentation was reduced to a process that lasted just a few hours, in which all parties - the banks, the importer and the exporter - were constantly aware of the status of the documents."
Wave’s blockchain platform also allows changes and correction in the documentation until the arrival of the shipment in the destination. It introduces electronic signatures, simultaneous distribution of copies to all necessary parties, and the generation of 'receipt of ownership' of the documentation at every step of the supply chain.
The introduction of blockchain technology in such a massive supply chain has not only reduced the cost of operations, but also made them more transparent and reduced operational risks.
Daniel Berenguer, BBVA's head of digital trade finance, said: “The operation was registered and securely validated at the same time for all parties, thanks to the distributed ledgers and the immutability of blockchain.”
BBVA is testing the incorporation of the blockchain system in various areas of its operation. Apart from this pilot project with Wave, BBVA is also carrying out blockchain-based Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term exchange processes with Ripple. BBVA is part of the main consortiums working on the development of platforms and concept tests linked to blockchain technology, such as R3, Hyperledger, Enterprise Ethereum Alliance and Alastria.
Spain’s second-largest lender, BBVA, in collaboration with Wave, has launched a 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 tampe 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 tampe Read this Term-based pilot program to automate document presentation in import-export operations between Spain and Latin America.
The efficiency of blockchain technology reduces the sending, verification, and authorization of foreign trade transaction time from 7-10 days to a mere 2.5 hours.
Under the pilot program, a real sale operation was conducted between Mexico and Spain, in which a company named Frime, located in Barcelona, purchased more than 25 tons of frozen tuna from Pinsa Congelados, a Mazatlán company (Mexico). The operation was carried out through a letter of credit, the most traditional payment system in international trade operations, issued by BBVA Spain and paid by BBVA Bancomer.
As explained by the financial institution, the large amount of documentation required by a letter of credit involves a series of processes that in most cases involve manual checks and the sending of physical documents. When unavoidable errors are taken into account, this process can extend to almost two weeks.
BBVA’s global trade and international banking head, Patxi Fernández de Trocóniz, said: “The pilot we carried out with Wave represents a leap forward in improving the efficiency of international trade transactions. The time it takes to manage the documentation was reduced to a process that lasted just a few hours, in which all parties - the banks, the importer and the exporter - were constantly aware of the status of the documents."
Wave’s blockchain platform also allows changes and correction in the documentation until the arrival of the shipment in the destination. It introduces electronic signatures, simultaneous distribution of copies to all necessary parties, and the generation of 'receipt of ownership' of the documentation at every step of the supply chain.
The introduction of blockchain technology in such a massive supply chain has not only reduced the cost of operations, but also made them more transparent and reduced operational risks.
Daniel Berenguer, BBVA's head of digital trade finance, said: “The operation was registered and securely validated at the same time for all parties, thanks to the distributed ledgers and the immutability of blockchain.”
BBVA is testing the incorporation of the blockchain system in various areas of its operation. Apart from this pilot project with Wave, BBVA is also carrying out blockchain-based Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term exchange processes with Ripple. BBVA is part of the main consortiums working on the development of platforms and concept tests linked to blockchain technology, such as R3, Hyperledger, Enterprise Ethereum Alliance and Alastria.