Japan’s Mizuho Bank is moving forward with plans to use blockchain for trade finance.
The bank said Friday (July 7) that it has completed its first distributed ledger-based trade finance transaction between Australia and Japan, with data and document sharing successfully transmitted between parties using blockchain.
The venture is part of a collaboration between Mizuho and Marubeni Corp. and Sompo Japan Nipponka Insurance. According to the bank, distributed ledger enables a significant reduction in the time it takes for all necessary trade documents to move between parties.
But Mizuho said it still has a long way to go before the practice becomes common.
“These include the sharing of data with parties not on the permissioned blockchain, and enabling the wider transmission of supplementary information related to any particular transaction,” the bank said in its announcement. It did not indicate whether it was able to transfer funds between the parties involved or whether it will look to do so in the future.
Earlier this year Mizuho said it was working with IBM Japan to develop a blockchain-based trade finance platform.
“The Mizuho Financial Group and Mizuho Bank’s project marks an important step in using blockchain technology for actual operations in trade finance,” said Masao Sanbe, IBM Japan’s managing director of industry sales, in a statement at the time. “In working with global trade networks to digitize documentation and processes, IBM recognizes the potential of blockchain to help streamline financial trade services.”
The bank is also working to promote FinTech innovation in other ways. Last May Mizuho announced the launch of a venture to create new FinTech companies and said it already has about 20 projects in the works. Some of the initiatives involve blockchain, and others are focused on artificial intelligence in industries like travel and farming.