Reports in bobsguide on Wednesday (Feb. 21) said the initiative, dubbed Marco Polo, involves BNP, Commerzbank and ING as they explore how to deploy blockchain to enhance trade finance operations. The companies banded together last September and have since included Standard Chartered, DNB and OP Financial Group.
Earlier this year, Marco Polo expanded again to add more third-party players, including credit insurers, logistics companies and more as they begin testing the solution.
“We see the proof of concept as an important milestone in this project,” said BNP Paribas Head of Transaction Banking EMEA Jacques Levet in a statement. “The fact that more banks have joined also illustrates the interest in this project and in the potential of DLT [distributed ledger technology] in supply chain finance solutions.”
In another statement, Commerzbank AG Divisional Board Member, Fixed Income, Currencies & Commodities and Trade Finance & Cash Management, Nikolaus Giesbert, said the initial financial institutions (FIs) that spearheaded Marco Polo have already successfully tested the tool.
“We are one of the first three banks to successfully perform the proof-of-concept acceptance tests, which is a major achievement for us,” the executive said. “We are pleased with how far the development has come in such a short timespan. Together we have proved that blockchain technology will make trade finance faster and more transparent for all participants.”
There is a $1.5 trillion gap in available trade finance across the globe, according to analysts at the Asian Development Bank. Industry players have begun to examine how blockchain may be able to address that shortage, but Krishnan Ramadurai, the International Chamber of Commerce Trade Register Project’s new chair and HSBC’s global head of Capital Management for Trade and Receivable Finance, recently told PYMNTS the technology is still too young to make a significant impact.