A consortium of seven of the largest European banks has selected IBM to build and host a blockchain finance platform aimed at SMEs.
Based on IBM Blockchain and Hyperledger Fabric, the purpose of the Digital Trade Solution project is to ‘simplify and facilitate’ cross-border trade for small and medium companies across Europe.
The consortium is made up of Deutsche Bank, HSBC, KBC, Natixis, Rabobank, Societe Generale and Unicredit.
By connecting the various parties involved in a cross-border trade transaction via online and mobile devices, the platform will simplify the task of managing, tracking and securing multipart economic interactions.
Another function will be to address the ‘traditionally underserved’ financing gap of SMEs by opening up new revenue streams and initiate new trading relationships. The world bank estimates that 50% of SMEs do not currently have access to formal credit.
The platform wants to increase SME access to financing by increasing the accountability and transparency. SMEs will be able to access a consolidated view of all trade transactions, helping to promote transaction accountability and reducing risk.
The entire supply chain will also be digitised, from order to settlement, so that all parties can track and trace transactions.
Digital Trade Chain Consortium
The Digital Trade Chain is expected to go into production by the end of 2017.
The consortium, which was launched in January 2017, hopes to expand to include more banks as well as trading partners like shippers, freight forwarders and credit agencies in the coming years.
Marie Wieck, general manager at IBM Blockchain, said:
“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.”
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