Blockchain-based system is tested for real.
Blockchain technology has endless possibilities in the financial services sector, but few practical applications have been launched that impact a company's financial operations. This could soon change, however, with trading partners Ornua, an Irish dairy company, and state-owned wholesaler Seychelles Trading Company completing the first-ever letter-of-credit trade finance deal using blockchain technology for the underlying document transfer. The system uses an electronic ledger for document exchange between trading partners.
The blockchain-based system underpinning the deal was created by Wave—a start-up launched from the TechStars financial technology accelerator. Wave's technology will be leveraged by UK bank Barclays.
Shipping documents and other trade documents are visible to all parties via Wave's secure, decentralized network.
"Moving to paperless trade would be hugely beneficial in supporting the supply chain," says David O'Rourke, group trade finance manager at Ornua. He says it results in "reduced costs, error-free documentation and fast transfer of original documents."