European banks select IBM to build blockchain-based international trade platform
A consortium of seven of the largest banks in Europe, including Deutsche Bank and HSBC, haven chosen IBM to build and host a new international trade platform based on blockchchain technology.
Dubbed the Digital Trade Chain, IBM’s blockchain implementation will leverage its contributions to Hyperledger Fabric, an open-source effort to improve blockchain for mainstream commercial adoption. The initiative will be one of the first real-world, large-scale uses of blockchain in the financial world.
IBM was selected through a competitive bidding process by the consortium, which also included KBC, Natixis, Rabobank, Societe Generale and Unicredit. It will address the financing gap of small and medium enterprises, opening new revenue streams and initiating new trading relationships with a market where half of companies do not have access to formal credit.
The Digital Trade Chain will run in the IBM Cloud, connecting parties involved in trade transactions online and via mobile devices. With distributed ledger technology, it will manage, track, and secure both domestic and international transactions.
IBM’s blockchain experts participated in and spoke at One World Identity’s K(NO)W Identity Conference in Washington D.C. in May. Big Blue has played a major role in pushing blockchain for businesses, as the company is a contributor to the Hyperledger project.
IBM’s new Digital Trade Chain will also increase access to financing by offering both accountability and transparency for cross-border trade transactions. The platform will support customers from all banks in the consortium, and will help equip small and medium enterprises to initiate trade with new partners domestically or in other European markets.
“To make the Digital Trade Chain network a reality and enable it to serve potentially thousands of the consortium’s banking clients, we turned to IBM in enterprise blockchain to help us quickly bring this highly scalable system into production,” KBC Chief Information Officer Rudi Peeters said on behalf of the consortium. “Their blockchain and banking industry expertise will help us create a new platform for small and medium businesses in Europe that can enable them for faster, easier and cheaper trade transactions.”
Other advantages of IBM’s Digital Trade Chain include a platform with a consolidated view of trade transactions, optimization of administrative tasks by digitizing the supply chain process, and allowing trade partners to track and trace transactions as they are processed.
“In working with hundreds of clients around the world on a diverse range of blockchain projects, trade finance has emerged as one of the strongest use cases for the technology,” IBM Blockchain General Manager Marie Wieck said. “By addressing the SME market, which faces challenges in data sharing and access to capital, the Digital Trade Chain Consortium is pioneering a unique blockchain solution with the potential for widespread impact.”