Barclays and an Israel-based start-up company have carried out what they say is the world’s first trade transaction using blockchain technology, cutting a process that normally takes between seven and 10 days to less than four hours.
The transaction was made via SWIFT infrastructure, the bank said, and included the transmission of a letter of credit between Irish food conglomerate Ornua and Seychelles Trading Company.
Barclays said using blockchain technology for trade financing could heighten efficiencies and lower costs by removing paper-based letters of credit between trading partners. The bank added that blockchain could also reduce the threat of fraud in these documents.
Barclays Global Head of Trade and Working Capital Baihas Baghdadi said the collaboration with Wave may “potentially transform trade finance for businesses around the world.”
Ornua Co-operative Group Trade Finance Manager David O’Rourke seemed to agree.
“Moving to paperless trade would be hugely beneficial in supporting the supply chain, through reduced costs, error-free documentation and fast transfer of original documents to our customers worldwide,” he said.
Reports said Barclays and Wave will take their next step in this initiative by collaborating with other trade finance clients.
Last year, Wave Founder Gadi Ruschin spoke with reporters at CoinDesk about its deal with Barclays and the potential for blockchain to disrupt trade finance.
“Blockchain is a very good solution to eliminate the pain in international trade,” the executive said, “because you have an industry that combines all industries, because all industries are either importers or exporters at some level. You have the carrier, the bank and the customer, and it’s hard to find one centralized entity everyone can work with.”
With Barclays, Wave said its looking to act as that centralized entity to move data between parties via distributed ledger technology.
(Barclays)
