The transaction involved international food conglomerate Cargill, a shipment of soybeans from Argentina to Malaysia via Singapore, and a letter of credit between the two banks issued on the Corda platform. 

According to the parties involved, the successful transaction demonstrated that trade digitisation via the blockchain is commercially and operationally viable. 

The trade finance industry is worth around $9 trillion annually and conventional paper-based, letter of credit transactions can involve multiple parties and take between 5 to 10 days. In contrast, this transaction was completed on a single shared platform and took less than 24 hours to be completed. 

“Trade finance transactions have been made simpler, faster, more transparent and more secure,” said Vivek Ramachandran, HSBC’s head of growth and innovation. “The need for paper reconciliation is removed because all parties are linked on the platform and updates are instantaneous. The quick turnaround could mean unlocking liquidity for businesses.”

The successful transaction was also welcomed by the other parties involved. “[Blockchain] is a key technology we are exploring and using with our own customers and, now, using for ourselves with the completion of this transfer on Corda,” explained Rani Misra, regional treasurer, APAC, Cargill. 

Ivar Wiersma, managing director, innovation wholesale banking, ING, said the project was testament to the power of "collaboration with other ecosystems’ stakeholders like regulators, ports, customs and logistics providers such as large shipping carriers. And in particular, collaboration with other banks, even our peers".

Meanwhile R3, the company which operates the Corda application along with 12 supporting banks, is looking to expand the use of the network as a utility for the trade finance sector, an industry which is still heavily reliant on paper-based documentation.

A number of banks and blockchain companies have looked to develop pilots and proof of concepts in this space in the last two years and it remains to be seen which ones will prove to be successful in the long-term given the multiple moviing parts associated with global trade transactions.