IBM said that they are building Blockchain technology for the world’s seven largest banks to ease out an international trade for small and medium size enterprises.
The banks that are part of this consortium are Deutsche Bank, HSBC, KBC, Natixis, Rabobank, Societe Generale and Unicredit.
Wiebe Draijer, chairman of the executive board at Rabobank said,
“There are many many tests and every bank and every fin Tech are experimenting with use cases of the blockchain. We are moving a step further with seven banks, putting together an application based on blockchain where we facilitate small-and-medium-sized enterprises when they export. And the blockchain technology is very powerful and supports that proposition,”
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This project of IBM would be a symbol of first use of Blockchain technology in reality in the financial world. Though the potential of Blockchain technology has been talked almost for a couple of years. But it is the first time the technology would go live.
The blockchain is a general term for a distributed digital ledger that can record transactions and is tamper-proof. It’s the underlying technology that makes cryptocurrencies such as bitcoin and Ethereum possible.
It will be built on Hyperledger Fabric which is an open source Blockchain framework.
Parties can now track, manage and transact internationally with the help of this Blockchain and Digital Trade chain being built by IBM.
Weibe Draijer explained it with an example of payment that Blockchain triggers when a merchant sells goods to another party. Adding further he said,
“We take care of the payment that’s still the old payment technology, but the whole infrastructure, the administration is done on the blockchain. And ultimately we will also move the payment into that blockchain solution when the payment in blockchain is ready to be robust for large-scale application.”
Wells Fargo, Barclays and Commonwealth Bank of Australia are one of the many banks that have done trials with the Blockchain technology. They used it last year to process and execute a shipment of cotton from the U.S to China. While Barclays has tried Blockchain technology for derivatives trading.
Date: June 28, 2017