Standard Chartered is the latest financial institution to have completed a trade finance transaction via blockchain, the bank announced Thursday (Jan. 24).
Reports in Business Times said the FI’s unit in Singapore has completed its first cross-border trade finance transaction using blockchain infrastructure from Distributed Ledger Technologies.
The transaction involved Standard Chartered generating digital trade documents for Agrocorp International, an agriculture commodities trader, to move a shipment of chickpeas from a supplier in Australia to the customer, BSM Global, based in Bangladesh, the press release said. Data that the parties could view on the platform include information about farming practices and commodities origins.
Using the blockchain platform, Standard Chartered generated digital trade documents for Agrocorp to receive a chickpea shipment from its supplier.
Standard Charted is using blockchain to provide parties involved in a trade finance deal to access the appropriate digital trade documents. Now, the bank said it plans to expand the solution to more corporate customers both in Singapore and around the world.
In a statement, Ujjwal Jain, Standard Chartered head of trade for Singapore transaction banking business, said the technology used “enables the bank to support our clients’ entire supply chain and provide seamless trade financing within a day.
“This helps free up cash flow and working capital,” continued Jain, “which our clients and their supply chain can reinvest into their business.”
In October Standard Chartered announced a collaboration with HSBC and several other banks to roll out a blockchain-powered trade finance solution, eTrade Connect. That initiative aims to cut the average approval time for trade financing from one-and-a-half days to just four hours.
Reuters reports at the time noted that trade finance transactions totaled more than $9 trillion in 2017, much of which was facilitated using manual processes and paper. Banks using blockchain to accelerate this process also say the technology can enhance security and transparency of global trade as well.