August 10, 2016
Consortium proves Letter of Credit transactions can be executed on Blockchain
Digital innovation heralds trade efficiency benefits for banks and companies
August 10, 2016: Bank of America Merrill Lynch, HSBC and the Infocomm Development Authority of Singapore (IDA) announced today that they have jointly developed a prototype solution built on blockchain technology that could change the way businesses around the world trade with each other. The consortium utilized the Linux Foundation open-source Hyperledger Project blockchain fabric; its development was supported by IBM Research and IBM Global Business Services.
The application mirrors a paper-intensive Letter of Credit (LC) transaction by sharing information between exporters, importers and their respective banks on a private distributed ledger. This then enables them to execute a trade deal automatically through a series of digital smart contracts.
The proof of concept shows potential to streamline the manual processing of import/export documentation, improve security by reducing errors, increase convenience for all parties through mobi ...