A land grab is happening in the trade finance space, with several blockchain-based consortia pushing to commercialise their platforms ahead of the competition. “[The consortia] are building scale and utility, with a growing number of active clients and transactions,” says Keith Bear, vice-president, financial markets, at tech giant IBM. “The aim is to reach a tipping point, where a swell of banks join because they don’t want to miss out on the connected clients and associated volumes going through these platforms.”
IBM and bank-led consortium R3 have been making the most noise over the past six months, especially as their platforms move into production mode. For example, R3’s blockchain project – which has 12 global banks involved including BBVA, Mizuho and US Bank – was the first trade finance prototype to pilot in 2017 aimed at letters of credit (LoCs).
