The bank said it has conducted its first cross-border trade finance deal using the distributed ledger technology.
Standard Chartered has completed its first blockchain-enabled cross-border trade transaction in Singapore for Agrocorp International, a sign of how financial organisations are trumpeting their work with this distributed ledger tech.
The trade finance transactions were carried out to enable deals in agricultural produce stretching from Australia to Bangladesh.
The UK-listed bank said it carried out the transaction inside 24 hours, slashing the time that it would have taken otherwise - possibly up to seven days.
Following this, Standard Chartered plans to extend this solution to more clients in the region and globally.
“The blockchain platform also provides Agrocorp’s customer BSM Global, a large-scale trader and distributor in Bangladesh, with information including the origin of commodities purchased and farming practices used. Such capabilities enable companies to source from farmers according to their own sustainability principles,” the bank said.
Recent days have seen examples of private banks providing dealing and custody facilities for cryptocurrencies and blockchain-related fields. The rise of the controversial digital currency Bitcoin, and the rather less contentious blockchain, has driven debate on how or whether they will change banking, finance and fields such as medicine, intellectual property rights and trade. Recent figures from Switzerland’s “crypto valley” show that at the end of December 2018, the sector contained 750 companies using the distributed ledger technology that defines Blockchain. This corresponds with a growth of 121 companies, or almost 20 per cent compared with the last count at the end of September 2018.
“Our ability to connect with blockchain-powered platforms such as 'dltledgers’, enables the bank to support our clients’ entire supply chain and provide seamless trade financing within a day. This helps free up cash flow and working capital which our clients and their supply chain can reinvest into their business. The transparency of the whole process also helps build trust and loyalty across the supply chain to promote more cost-efficient products and services. This is a win-win for all parties,” Ujjwal Jain, head of trade, Transaction Banking Singapore, Standard Chartered Bank, said.