Blockchain trade finance platforms see value in network effect
There has been a distinct shift towards collaboration rather than competition as new distributed ledger technology platforms continue to emerge and more established platforms extend their reach.
The number of blockchain trade finance platforms continues to grow.
A report produced for TradeIX earlier this month suggests there are more than 30 groups of banks and other financial institutions working on systems for incorporating blockchain technology into trade finance.
While some of these platforms are still in development, others are supporting customer transactions.
For example, UniCredit in March completed its first Italian transaction through we.trade, facilitating a trade between metal packaging producer Gruppo ASA and its supplier, Steelforce.
However, recent developments suggest these platforms have recognized that to expand their reach effectively they need to work together.
An obvious example of a platform that was developed with collaboration in mind is komgo, which, after two years of proof of concept and pilots, incorporated in August and went live with its first letter of credit in December.
The platform is only used by its shareholders – which include some of the world’s largest commodity trade and finance companies – although CEO Souleїma Baddi says it will be available to non-shareholders later this month.