Blockchain consortium R3 is collaborating with 12 banks and technology vendor TradeIX on an open-account trade finance project for corporate buyers and sellers around the world.
R3, TradeIX and the participating banks - Bangkok Bank, Barclays, BBVA, Bladex, BNP Paribas, Commerzbank, CTBC Bank, ING, Intesa Sanpaolo, Shinhan Bank, Royal Bank of Scotland and Wells Fargo - are developing an end-to-end open account trade finance business network which will be powered by TradeIX and R3’s Corda distributed ledger platform.
This initiative aims to provide a suite of trade specific APIs and technology tools, a rules engine, and an interoperable core infrastructure for trade data, contracts, and transactions, improving access to account trade across the global ecosystem of banks, buyers, suppliers, technology providers, insurers, and other parties, such as logistics companies.
David Rutter, CEO of R3, comments: “Existing trade finance infrastructure is in serious need of an upgrade, and this project is a big step towards the adoption of reliable, efficient and standardised processes for the entire sector.”
The initial development phase involves creating standard trade finance smart contracts on a distributed ledger infrastructure with the objective of providing a single record for critical trade data including identities, purchase orders, invoices, shipping and logistics information, trade assets, financing activity, and credit risk. Following this phase, Rutter says R3 and TradeIX will engage the broader ecosystem, expanding services and onboarding additional members.
Marguerite Burghardt, global head of the trade competence center at BNP Paribas, says: “We see this initiative as complementary with other initiatives and trade platforms. Building smart contracts to capture the SCF business logic on DLT is an essential step that will significantly boost the trade finance ecosystem. This consortium with R3 provides an excellent opportunity to work on this collaboratively."
R3 also announced that the International Trade and Forfaiting Association (ITFA) is joining the R3 network and will be involved in this project and others.