R3, TradeIX, and 12 financial institutions have joined forces to develop an end-to-end open account trade finance business network based on distributed ledger technology (DLT).
The network will be powered by TradeIX and R3’s Corda DLT platform. The participating financial institutions include Bangkok Bank, Barclays, BBVA, Bladex, BNP Paribas, Commerzbank, CTBC Bank, ING, Intesa Sanpaolo, Shinhan Bank, Royal Bank of Scotland, and Wells Fargo.
The project aims to provide innovative open account trade solutions, including a suite of trade specific APIs and technology tools, a sophisticated rules engine, and an open, standard core infrastructure for trade data, contracts, and transactions. The infrastructure would enable a higher degree of interoperability and is designed to ensure compatibility with existing platforms as well as R3 and other ecosystems.
The network would enable financial institutions to automate pre- and post-shipment financing and risk mitigation for corporate buyers and sellers across the globe. Corporate buyers and sellers, in turn, would gain access to light and flexible API-driven technology solutions that help simplify trade, improve visibility into trade flows, and provide access to credit and risk mitigation services at critical points in the trade lifecycle.
In addition, the business network will also improve access to open account trade for the global ecosystem of banks, buyers, suppliers, technology providers, insurers, and other parties, such as logistics companies, that are critical to facilitating global open account trade flows.
“Earlier this year R3, TradeIX and a core group of R3 members teamed up to redesign the infrastructure behind open account trade finance utilising our Corda platform and the TIX-Platform of TradeIX. Existing trade finance infrastructure is in serious need of an upgrade, and this project is a big step towards the adoption of reliable, efficient and standardized processes for the entire sector,” David Rutter, CEO of R3, said.
According to the official release, the initial development phase would see the development of standard trade finance smart contracts on a distributed ledger infrastructure. This would enable secure and automated financing of supply chain using a single record for critical trade data including identities, purchase orders, invoices, shipping and logistics information, trade assets, financing activity, credit risk, and more.
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