A consortium of seven European banks has selected IBM to build and host a new trade finance platform based on blockchain technology.
The platform is aimed at simplifing and facilitating domestic and cross-border trade for small and medium enterprises in Europe.
To develop the platform, the Digital Trade Chain Consortium which consists of Deutsche Bank, HSBC, KBC, Natixis, Rabobank, Societe Generale and Unicredit has selected the technology giant IBM through a global competitive bidding process.
The platform, which will be based on IBM Blockchain powered by Hyperledger Fabric, will also aimed at increasing overall trade transaction transparency.
IBM plans to develop the new solution on Hyperledger Fabric v1.0.0, which is an open source blockchain framework and and one of the five Hyperledger projects hosted by The Linux Foundation. The Digital Trade Chain is expected to go into production by end of 2017.
The Digital Trade Chain Consortium will run the Digital Trade Chain solution on IBM Cloud and the solution is claimed to have been designed to connect the parties involved in a trade transaction, both online and through mobile devices.
The solution addresses the challenge of managing, tracking and securing domestic and international trade transactions in order to simplify trade finance processes.
IBM claims that bringing blockchain technology to the reach of small and medium enterprises (SMEs), an underserved market segment for a long time, can open up new streams of revenue. The solution is also expected to help the enterprises to initiate new trading relationships and boost trade growth.
With the new platform, SMEs can gain access to financing as it infuses cross-border trade transactions with accountability and transparency. In addition, the scalable platform can support SMEs to start trade with new partners, both domestically and in other European markets.
The Digital Trade Chain will be designed to provide a consolidated view of trade transactions for SMEs.
KBC chief operating officer Rudi Peeters on behalf of the Consortium said: “To make the Digital Trade Chain network a reality and enable it to serve potentially thousands of the consortium’s banking clients, we turned to IBM in enterprise blockchain to help us quickly bring this highly scalable system into production.
“Their blockchain and banking industry expertise will help us create a new platform for small and medium businesses in Europe that can enable them for faster, easier and cheaper trade transactions.”
IBM Blockchain general manager Marie Wieck said: “In working with hundreds of clients around the world on a diverse range of blockchain projects, trade finance has emerged as one of the strongest use cases for the technology.
“By addressing the SME market, which faces challenges in data sharing and access to capital, the Digital Trade Chain Consortium is pioneering a unique blockchain solution with the potential for widespread impact.”
Image: New blockchain services from IBM help developers create and manage blockchain networks to power a new class of distributed ledger applications. Photo: courtesy of IBM.