R3, CGI and eleven banks develop blockchain-based trade finance app
The participants say the blockchain-based app incorporates shippers and carriers, and “holds potential to improve trade flows, particularly for SMEs in developing economies”.
It could “significantly reduce inefficiencies and costs by streamlining the processing of sight letters of credit [LCs]”, they explain.
The banks involved are Bangkok Bank, BBVA, BNP Paribas, HSBC, ING, Intesa Sanpaolo, Mizuho, RBS, Scotiabank, SEB and US Bank.
“Several R3 member institutions now intend to pilot the platform with the goal of making it widely available in 2018,” the consortium says. These include HSBC and US Bank.
David Rutter, CEO of R3, describes the application is “the first of its kind”.
“Despite the growth of open account business, traditional trade finance remains vitally important, particularly to facilitate international trade,” the consortium states.
According to the International Chamber of Commerce (ICC), commercial LCs still account for 38% of the trade finance product mix.
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