Four major banks have joined an initiative launched by UBS Group and IBM Corp that seeks to build blockchain-based technology to support trade finance transactions, Reuters reports.
Commerzbank, Bank of Montreal, Erste Group Bank and CaixaBank are participating in the Batavia project that will help lenders and their clients automate the trade finance process, the report said.
Among other things Batavia will allow parties to track a transaction from when a shipment leaves a port to when it reaches its destination.
Blockchain, which was first developed to power cryptocurrency bitcoin, is a shared ledger of data that is maintained by computers, rather than a central authority.
Trade finance is considered a good use for the technology because it involves numerous parties such as the institutions financing the transactions, buyers, sellers, transporters and inspectors.
Currently each party maintains its own records, which can lead to mistakes and delays. The new platform aims to provide all participants with a shared record, reducing errors and driving more business, the report said.
“Trade finance is a perfect use case because there are so many participants in a trade ecosystem especially when you talk of global trade,” Marie Wieck, a general manager at IBM Blockchain, was quoted as saying in an interview.
“Digitizing and creating a level of trust is a perfect accelerator (for business).”
A pilot is expected to take place with the new banks in the first quarter of 2018, Wieck said. The project was first announced in 2016.
– Contact us at [email protected]