The firms claim that they have become the world’s first organizations to execute a blockchain transaction.
Barclays said a letter of credit transaction was executed between Ornua (formerly the Irish Dairy Board) and Seychelles Trading Company through a blockchain platform set up by Wave.
The new blockchain based system developed by Wave is expected to accelerate trade transactions, cut costs and reduce the risk of documentary fraud.
The system uses distributed ledger technology to ensure that all parties can see, transfer title and transmit shipping documents and other original trade documentation.
Barclays trade & working capital global head said: “One of the biggest headaches in global trade currently is the vast movement of paper required to facilitate transactions, with multiple organisations in the chain.
“That is why we’ve been very keen to partner with Wave in using blockchain technology to save time and money for our clients, and potentially transform trade finance for businesses around the world.”
The lender said that the Wave system could also reduce the time taken to complete an end to end trade finance transaction from days to a few hours.
Following the pilot run, the firms plan to work with a select group of trade finance clients to develop the service further.
Wave CEO Gadi Ruschin said: “Effective use of blockchain technology really can have a huge impact on the future of trade. By adopting our system, trade can be done more easily and more cheaply.”
Blockchains, which are online ledgers to record transactions, have gained prominence following the growing popularity for the digital currency bitcoin.
Distributed ledger technology is expected to help in completing financial transactions with greater speed, security, cost-efficiency and transparency compared to the existing system.
Image: Barclays Bank HQ, Docklands, London. Taken by C Ford, March 04. Photo courtesy of Secretlondon/Wikipedia.
