Barclays and Wave have managed to complete a trade transaction using blockchain, and that is really important. Announcing the breakthrough, the companies sad a letter of credit transaction between Ornua and Seychelles Trading Company is the first to have trade documentation handed via Wave. Funds were sent via Swift.
The big deal here is that in transactions like this one, there are multiple participants in different jurisdictions all over the planet, resulting in a bunch of paperwork. This new technology could simplify the process dramatically. Barclays believes the first, and most easily recognisable cost benefit, will be on courier cost. The time needed to complete an end-to-end trade finance transaction could be reduced from days, to ‘just a few hours’.
“One of the biggest headaches in global trade currently is the vast movement of paper required to facilitate transactions, with multiple organisations in the chain,” said Baihas Baghdadi, Global Head of Trade & Working Capital at Barclays.
“That is why we’ve been very keen to partner with Wave in using blockchain technology to save time and money for our clients, and potentially transform trade finance for businesses around the world.”
“Effective use of blockchain technology really can have a huge impact on the future of trade. By adopting our system, trade can be done more easily and more cheaply,” added Gadi Ruschin, CEO at Wave.
“Studies show that as much as five per cent of the cost of a trade transaction comes from the handling of documentation, so there is a significant opportunity to improve this element of the trading process. We think we’ve got the right answer, and look forward to working with Barclays to develop it further and create an industry wide solution.”
Image Credit: Howard Lake / Flickr