R3 Blockchain Consortium, a group comprising over 50 major financial and tech institutions across the globe, has been successful in solving various trade challenges using the blockchain technology.
The New York-based fintech firm has recently announced an unprecedented success with its Corda distributed financial ledger. The trial involving invoice financing and letter of credit transactions was conducted in partnership with 15 consortium members. Through these trials, the consortium has proven twice that the digital currency technology can address key challenges faced by trade finance industry across the world.
The 15 financial institutions that took part in the trial include: Barclays, BBVA, BNP Paribas, Commonwealth Bank of Australia, Danske Bank, ING, Intesa Sanpaolo, Natixis, Norder, Scotiabank, UBS, UniCredit, U.S. Bank and Wells Fargo.
Smart contracts have proven to enable automation of various trade processes, thus reducing settlement times to great extents. The blockchain’s immutable nature is also instrumental in preventing fraud, thereby saving millions of dollars annually. As a part of the trial, participants used smart contracts created over the proprietary R3 Corda distributed financial ledger platform to process accounts receivable and purchase transactions.
The implementation of smart contracts to process invoice financing and letter of credit operations is found to increase transparency. With