Barclays and Wave pioneer blockchain trade finance transaction

Barclays and Wave pioneer blockchain trade finance transaction

Barclays and fintech start-up Wave claim to have become the first organisations to complete a global trade transaction using distributed ledger/blockchain technology.

Barclays is now calling on other banks to adopt Wave’s platform. “This can develop into an industry-wide improvement in how trade documentation is managed,” Barclays urges.

The letter of credit (LC) transaction between Ornua (formerly the Irish Dairy Board) and Seychelles Trading Company is the first to have trade documentation handled on the new Wave platform, with funds sent via Swift.

“This landmark transaction could herald a new era of simpler, safer and faster trade finance,” Barclays and Wave hope.

At present, trade finance transactions tend to involve multiple participants in various jurisdictions around the world – hence requiring a lot of paperwork, counter-signing and courier journeys.

Wave says its blockchain-based system alleviates these burdens. “It uses distributed ledger technology to ensure that all parties can see, transfer title and transmit shipping documents and other original trade documentation through a secure decentralised network, eliminating many of the current inefficiencies in international trade,” the vendor states.

“The new system could therefore speed up trade transactions [from days to a few hours], reduce costs for companies around the world and reduce the risk of documentary fraud.”

Wave was one of 11 start-ups to have gone through the Barclays Accelerator programme in New York last summer. Since then it has been working with Barclays’ trade and blockchain team in the UK and South Africa.