Technology
Wave Of Big Banks To Develop, Launch Blockchain-Based SME Trading Platform
Digital Trade Chain is based on a prototype trade finance and supply chain solution originally developed by KBC.
A group of seven banks, including Deutsche Bank,
HSBC and Société
Générale, has signed an agreement fostering the development
of Digital Trade Chain, a product that uses blockchain
technology to ease commerce between European small- and
medium-size businesses.
Blockchain technology, a virtual distributed ledger of
transactions shared peer-to-peer, can record ownership across a
public network of computers rendered tamper-proof by advanced
cryptography. It is already known as the platform for the
controversial digital currency bitcoin. The nascent technology is
causing a stir within the financial services sector as its
supporters believe it could reduce hidden expenses in the
financial system by ousting inefficiencies across areas such as
payments, syndicated loans and equity clearing.
Digital Trade Chain is based on a prototype trade finance and
supply chain solution originally developed by KBC, an Irish bank,
which in addition to Natixis, Rabobank, UniCredit and the
three mentioned above signed a memorandum of understanding in
Brussels. The blockchain technology-based offering seeks to
“seamlessly” connect the parties involved in a trade transaction
- typically the buyer's bank, seller, seller's bank and
transporter – online and through mobile devices, Deutsche Bank
said in a statement.
By maintaining secure records on a digital distributed ledger,
Digital Trade Chain will accelerate the order-to-settlement
process and decrease administrative paperwork significantly,
Frankfurt-headquartered Deutsche Bank said. The platform's
heightened level of transparency will give SMEs confidence to
initiate trade with new partners in their home market or in other
European markets, the firm added.
Pooling expertise and resources, the consortium's members will
initially focus on launching a scalable version of Digital Trade
Chain in seven European markets: Belgium, Luxembourg, France,
Germany, Italy, the Netherlands and the UK.
