Trade finance on blockchain moves to full commercial production
A soybean trade between two arms of Cargill using letters of credit from HSBC and ING shows the R3 Corda platform is finally set to scale up.
Last week, HSBC and ING Bank successfully executed a live trade-finance transaction for international food and agriculture conglomerate Cargill using R3’s Corda blockchain platform.
This was a bulk shipment of soybeans from Argentina, through Cargill’s Geneva trading arm to Malaysia, with Cargill’s Singapore subsidiary as the purchaser. A letter of credit (LC) was issued using Corda by HSBC to ING. The two banks were acting on behalf of the Cargill organizations.
But why should anyone care?
Banks have been touting such transactions for the best part of two years now. HSBC, Bank of America Merrill Lynch (BAML) and the Infocomm Development Authority of Singapore announced a breakthrough prototype in August 2016 for handling LCs on blockchain.
Then in January 2017, HSBC was one of seven bank founders of the Digital Trade Chain consortium.