(6 October 2017 – Europe) Commerzbank, Bank of Montreal, Erste Group Bank and CaixaBank have joined an initiative launched by UBS Group and IBM aimed at building blockchain-based technology to support trade finance transactions.
The companies said in a statement, the platform, named Batavia, would assist banks and their clients automate the trade finance process, which remains highly manual and paper-based.
Among other things Batavia will allow parties to track a transaction from when a shipment leaves a port to when it reaches its destination.
In a recent interview, Marie Wieck, a general manager at IBM Blockchain, said, “Trade finance is a perfect use case because there are so many participants in a trade ecosystem especially when you talk of global trade.”
“Digitizing and creating a level of trust is a perfect accelerator (for business).”
A pilot is expected to take place with the new banks in the first quarter of 2018, Wieck added.
The platform would also use so-called smart contracts, or computer programs on the blockchain that automatically enforce the terms of an agreement.
While the finance industry continues to experiment with blockchain, it is still in its early days and some caution that it may take several years before it leads to any benefits.