Blockchain - a tamper-proof distributed digital ledger system that can record transactions - is the underlying technology behind cryptocurrencies, like Bitcoin. This agreement would be one of the first real-world examples of using blockchain technology in financial institutions.
The banking consortium comprises Deutsche Bank, HSBC, KBC, Natixis, Rabobank, Societe Generale, and Unicredit. Together they make up the Digital Trade Chain Consortium, which earlier this year announced plans for a blockchain-based project designed to increase trade among small and medium-sized businesses.
The consortium's Digital Trade Chain solution will run in the IBM Cloud and connect parties involved in trade transactions, both online and mobile. It is designed to simplify the managing, tracking, and securing of domestic and international trade transactions.
The new platform will be based on "IBM Blockchain powered by Hyperledger Fabric." Hyperledger is "an open source collaborative effort to advance cross-industry blockchain technologies," while Hyperledger Fabric is a blockchain framework implementation using a modular architecture that allows components to be plug-and-play.
According to Rudi Peeters, CIO, KBC on behalf of the Consortium, "To make the Digital Trade Chain network a reality and enable it to serve potentially thousands of the consortium’s banking clients, we turned to IBM in enterprise blockchain to help us quickly bring this highly scalable system into production. Their blockchain and banking industry expertise will help us create a new platform for small and medium businesses in Europe that can enable them for faster, easier and cheaper trade transactions."
The solution is anticipated to help open new revenue streams and initiate new trading relationships and foster trade growth, as well as increase access to financing by adding accountability and transparency to cross-border trade transactions. The platform is highly scalable and can support customers from all banks in the consortium.
"In working with hundreds of clients around the world on a diverse range of blockchain projects, trade finance has emerged as one of the strongest use cases