As reported by the Singapore’s English language financial daily, The Business Times, on 24th January, the Standard Chartered bank’s Singapore branch has completed its first blockchain-powered trade finance deal.
Standard Chartered Bank is a multinational banking and financial services firm having its headquarter in London. Basis their annual report of 2017, Standard Chartered comprises over $600 billion in assets on their balance sheet
The financial institution revealed the product was developed by the blockchain startup, Distributed Ledger Technologies, and stated that the solution would facilitate the processing of the deal of an agri-business supply chain in just a day. Earlier, the processing time for the same was around a week.
The agri-business industry is still largely dependent on the traditional system and involves processing of complex paperwork. As of 2017, the volume associated with the trade finance transactions was more than $9 trillion.
Standard Chartered highlighted that the introduction of the blockchain solution has smoothened the process of digitization and sharing of trade documents among different parties within the supply chain network, thereby increasing the level of safety and transparency along with efficiency level.
The deployment of blockchain solution with respect to the digitization of trade documents and automation of several trade finance processes will enable to cut down the risk of fraud in letters of credit (LoC) and other related papers that prevail in the industry.
Standard Chartered joins the league of many other banks such as HSBC and BNP Paribas to have jointly developed and launched a blockchain trade finance platform named as eTrade Connect.
The first institution to enter this avenue was HSBC, which supposedly completed the world’s first ever blockchain backed trade finance transaction for issuing a Letter of Credit to Cargill which is the leader in the food and agricultural sector and one of the United States’ biggest private company by revenue.
Further, apart from the trade finance, Standard Chartered has been working across various products to be developed on the blockchain platform and are engaged in the development of the blockchain solutions for various other processes. During October 2018, the bank stated that they were also working on a trial for bank guarantees which is being developed by blockchain organization R3’s Corda blockchain technology
At the end of the last year, Standard Chartered had entered into a partnership agreement with Itau Unibanco, Brazil’s largest private bank, to form a blockchain based platform for enhancement of small loans.