B2B Payments

Blockchain Inches Slowly Out Of Pilot Phase

It seems that blockchain may never leave the lab and enter the real world. And, indeed, this week's Blockchain Tracker continues its coverage of ongoing tests and trails of blockchain solutions. That includes a new Know Your Customer (KYC) application for banks, as well as Hong Kong's latest cross-border trade finance initiative using distributed ledger technology (DLT).

However, blockchain solutions are slowly moving from testing to real-world application, with two solutions making the giant leap from pilot phase into the market. Take a look at the ongoing tests and the projects that made it out of the lab in the breakdown below.

Testing Continues

Banks and regulators joined together to begin testing a new KYC-compliance solution developed on R3's Corda blockchain platform. BNP Paribas, Deutsche Bank and 37 other participants are trialing the solution, an app built by Synechron using Microsoft Azure technology. Over four days of testing, the group was able to complete more than 300 transactions across 19 markets. The app lets banks' corporate customers build their own identities, as well as approve or reject banks' access. Banks automatically see any updated identity information when they are approved for access by customers who make changes.

"Traditional KYC processes are complex and often duplicative," said R3 in its announcement, according to CoinDesk. "This self-sovereign model allows corporate customers to create and manage their own identities, including relevant documentation, and then grant permission to multiple participants to access this data."

The idea, R3 added, is to enable banks to maintain KYC compliance without having to individually maintain and update KYC records.

As these bank partners and regulators test the KYC solution, the Hong Kong Monetary Authority (HKMA) continued its exploration of blockchain when it signed a cooperation agreement with the Financial Services Regulatory Authority (FSRA) of the Abu Dhabi Global Market (ADGM), which, according to CoinDesk, maintains the UAE capital's financial market. The collaborative agreement sees the two parties working together to develop blockchain-powered projects with a focus on international trade finance.

"We are particularly pleased to start a dialogue with FSRA on the opportunity to build a cross-border trade finance network using distributed ledger technology," said HKMA Chief FinTech Officer Nelson Chow in a statement.

Some blockchain initiatives haven't even gotten off the ground and into testing phase, thanks to doubt over the technology's maturity.

This week, the U.K. Financial Reporting Council's Financial Reporting Lab (FRL) released a report exploring potential applications of blockchain in the corporate accounting space. The FRL appears to be taking a cautious approach to the technology. However, noting that, while it shows promise in some scenarios like report production, distribution transparency and consumption reporting, overall, the technology is not yet sufficiently developed to make a meaningful impact in the market.

Emerging From Pilots

The blockchain testing seems never-ending but, this week, some projects finally took the leap out of pilot phase and into real-world application.

TheHive Project, for example, announced this past week that it has officially launched its platform. Its portal is up-and-running to connect small businesses to trade financing by enabling unpaid invoices to be uploaded to the solution. Each invoice is assigned a unique "fingerprint" by tokenizing the documents.

While the platform is now live, TheHive Project noted it has not yet launched a planning marketplace through which small businesses can actually access financing. Still, investors can presently purchase tokens to procure unpaid invoices that need financing. In addition to the official launch of its portal, TheHive Project also announced plans for a crowd sale to raise 2,000 bitcoin, which it said will be used to focus on development of its Hive Invoice Financing Fund so it can eventually lend to SMBs directly.

Earlier this week, we.trade a joint venture between nine European banks, IBM's Blockchain Platform and Hyperledger  announced the completion of the first cross-border corporate trades using its blockchain portal.

"These transactions prove that we.trade is a robust and commercially viable proposition," said we.trade COO Robert Mancone in a statement. “We are delighted to have launched, for the first time in the world, a blockchain-based platform that enhances the overall customer experience when trading internationally."

Now that the solution has shown functionality in a real-world setting, Mancone said the next step will be to add more bank partners and for their customers across Europe (and elsewhere) to use the solution.



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