A group of European banks has completed testing of what they say is the first commercially viable blockchain-based trading system, according to an official announcement.
Specifically, four banks used a blockchain-based system called we.trade to execute seven real-life transactions between ten companies over five days.
We.trade is a platform which tracks and manages transactions between businesses from beginning to end. According to its website, features real-time trade settlement and know-your-customer checks, as well as smart contracts ensuring automatic payment when an agreement is completed.
We.trade was established by Deutsche Bank, HSBC, KBC, Natixis, Nordea, Rabobank, Santander, Societe Generale and UniCredit, who began working on it in October 2017. A company must be a customer of one of these banks to use the platform.
It is currently available in eleven European countries. COO Roberto Mancone said: “The next step will be getting buy-in from additional banks and their customers in Europe and further afield.”
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We.trade is built on IBM’s blockchain and is powered by Hyperledger Fabric.
Hyperledger Fabric is, according to its website, a “blockchain framework implementation” that is able to hide transaction amounts from all people except that parties to that transaction. In this way, it can be trusted with confidential information, without it passing through a central authority.
Hyperledger itself is a collaborative project that promotes open source blockchain adoption around the world. It was created by the Linux Foundation in December 2015 and now has more than 200 companies from many different industries as members.
IBM was chosen to be the IT component of the partnership after outbidding six other interested parties.
Parm Sangha, GBS Blockchain Leader at IBM, said: “To convene a large network of regulated banks and demonstrate how blockchain technology can help them gain efficiencies and provide greater transparency in live transactions is a disruptive model that has the potential to reshape the future of global trade finance.”