IBOS member banks HSBC, KBC and UniCredit form ‘Digital Trade Chain’ consortium
IBOS member banks HSBC, KBC and UniCredit, along with four other large banks are collaborating on a blockchain-based trade finance and supply chain platform called Digital Trade Chain (DTC).
The DTC aims to make domestic and cross-border commerce easier for European small and medium-sized enterprises. Deutsche Bank, Natixis, Rabobank, Société Générale, and IBOS members HSBC, KBC and UniCredit have signed a Memorandum of Understanding in Brussels to build the DTC, which is based on a supply chain proof-of-concept originated by KBC.
In October 2016, DTC won the Efma Accenture Innovation Award for ‘best new product service of 2016.’ The purpose of DTC is to seamlessly connect the parties involved in a trade transaction, whether it is a buyer, buyer’s bank, seller, seller’s bank or transporter, both online and via mobile devices. This new product would also simplify trade finance processes for SMEs by addressing the challenge of managing, tracking and securing domestic and international trade transactions.
Vivek Ramachandran, Global Head of Product, HSBC commented:
“I believe trade is the perfect use case for distributed ledger technology. You want transparency, verifiability, and immutability of agreements and information.
Trade can either be done over a letter of credit, which is complex and expensive and time consuming, or you can trade on open account which has a huge amount of risk, because either the buyer or the seller – one of the counterparties is bearing the risk at any point in time.”
DTC would accelerate the order-to-settlement process and decrease administrative paperwork significantly. The platform’s end-to-end transparency would also give SMEs confidence to initiate trade with new partners in their home market or in other European markets.
Read the full article, via International Business Times UK, here.