Australian bank goes nuts for blockchain trade finance platform
The Commonwealth Bank of Australia (CBA) has completed a supply-chain experiment, shipping an order of almond nuts to Germany using blockchain distributed ledger technology.
Starting in Sunraysia in Victoria, Australia, the shipment was documented and tracked via the blockchain ledger all the way through the trade finance chain to delivery in Hamburg, Germany.
CBA’s blockchain platform was used to document each process in the trade finance network – starting with Olam Orchards loading the nuts for rail haulage by Pacific National to the Port of Melbourne, where a bill of lading was signed by stevedore Patrick Terminals onto a vessel owned by shipping group OOCL, through to final delivery in Hamburg.
Trade finance is traditionally short on trust and each party needs to see documentation that guarantees its next step in the supply chain. This was a paperwork-heavy and time-consuming operation traditionally, but distributed ledger technology provides every party in the chain instant access to the ledger and the process can be vastly simplified.
“Our blockchain-enabled global trade platform experiment brought to life the idea of a modern global supply chain that is agile, efficient, and transparent,” said Chris Scougall, managing director of CBA’s Industrials and Logistics division.
“We believe that blockchain can help our partners reduce the burden of administration on their businesses and enable them to deliver best-in-class services to their customers.”
Rival trade-finance platforms
CBA’s blockchain-enabled trade finance operation is the latest in a series of trials by financial institutions to utilize the distributed ledger technology in the supply chain.
British bank HSBC and ING of the Netherlands were among a group of partner banks that announced in May a live trade finance transaction for food and agriculture conglomerate Cargill, using R3’s Corda blockchain platform.
HSBC was also a partner in we.trade – a consortium of nine European banks including KBC, Santander and UniCredit – that completed a round of trade finance transactions on IBM’s blockchain network earlier in July.
“We aim to deliver a fully commercialized, enterprise-level solution for the European market by the end of this year,” said we.trade’s chief operating officer Roberto Mancone at the time.