ING, together with the British bank HSBC, has completed the first trade finance transaction based on blockchain technology.
The banks said on Monday that it concerns the financing of a cargo of soybeans being shipped from Argentina to Malaysia for the American agriculture and feed company Cargill. Using blockchain is intended to make such financing significantly more efficient.
In trade finance, banks act as a third party in an international transaction. The bank ensures that the buyer and seller have greater certainty about the delivery of the products and the receipt of payment.
Paper documents are still often used for this, and the entire process can sometimes take a long time. By digitising the process via blockchain technology, it will take less time and all parties can save money.
Worldwide, more than 2 trillion dollars’ worth of transactions are conducted each year using this type of financing. According to an earlier United Nations study, costs can be reduced by 31 percent if the procedure is digitised.