Back in 2016, I was fortunate to be part of the team chosen for a week-long workshop/training on Blockchain. We were introduced to the basics, formed teams and built some use cases to understand how it works. Subsequently, I could also participate in building
proof-of-concept on payments and trade finance. There was, and continues to be, a lot of interest in Blockchain as a concept and its utility to various use cases in banking - Centralized KYC, Invoice duplicity checks, Asset tokens, cross border payments, trade
finance and so on.
For trade finance in particular, at one extreme, adopting blockchain by all trade participants - exporter, importer, shipping, freight forwarders, customs, insurers etc. - could render banks as payment executors till the time fiat currencies were the legally
accepted tender. At the other extreme, it would just be bank-to-bank blockchain with LC Issuance still within the bank system and blockchain used as a cheaper (??) and faster alternative to SWIFT.
There have been multiple consortiums of banks experimenting on variations of blockchains, protocols and trade/supply chain finance use cases. Off and on we also hear about successful trade transactions being carried out as proof of concept.
The key (to derive the best from blockchain) though remains adoption of a single universal blockchain for trade transactions, all trade parties boarding this blockchain, international legal/regulatory framework to support, standardization and digital currencies.
#blockchain #tradefinance