Mizuho executes Japan-Australia trade finance deal via blockchain
(10 July 2017 – Japan) Japanese banking giant Mizuho has completed and revealed details of a trade finance transaction between Australia and Japan over a blockchain.
One of Japan’s “megabanks”, Mizuho has announced that it delivered a blockchain trial of a trade transaction between a Japanese exporter and Australian importer.
“All related processes, from issuing the letter of credit to delivering trade documents were completed entirely via a digital platform using blockchain,” the banking group’s fintech arm revealed.
The transaction also involved participation from insurer Sompo Japan Nipponkoa Insurance and the Marubeni Corporation, a Japanese trading conglomerate.
Speaking about the blockchain transaction, Mizuho said reduced times in the delivery of trade documents, from multiple days to around two hours is a significant advantage. In addition, the bank cited the reduction in costs including labour due to document digitisation.
However, the bank said an obvious drawback was not being able to transmit trade information to parties who haven’t yet adopted or begun using the blockchain. It also highlighted the need for international blockchain standards.
“Building on this trade transaction project, Mizuho aims to further explore the practical business application of blockchain/DLT and to offer technologically sophisticated, client-focused services going forward,” the banking group said in a report.
In past trials, Mizuho said it was “practically impossible to tamper with transaction histories” while shortening the timespan for cross-border securities from “three days to same-day settlement.”
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