Eight of Europe's largest banks have agreed to set up a joint venture company incorporated in Ireland to manage the roll out of Digital Trade Chain, a shared platform that aims at making domestic and cross-border commerce easier for European companies by harnessing the power of distributed ledger technology.
The Digital Trade Chain Consortium, which consists of Deutsche Bank, HSBC, KBC, Natixis, Rabobank, Societe Generale and Unicredit, was formed earlier this year to meet the financing gaps hampering domestic and cross-border trade for small and medium enterprises in Europe, while helping to increase overall trade transaction transparency.
The joint venture, which welcomes Banco Santander as a new consortium member, will be rebranded under the banner we.trade, with a commercial roll-out anticipated in Q2 2018 ahead of a test run in February with bank clients.
The consortium is expected to grow to include additional banks from other countries and as well as trading partners such as shippers, freight forwarders and credit agencies. To this end, a three-person onboarding team has been formed to welcome new banks to the platform.
IBM won the contract to provide the cloud-based system in a competitive bidding process in June. It will address the challenge of managing, tracking and securing domestic and international trade transactions by connecting all parties both online and via mobile devices.
News of the joint venture comes the day after top bankers attending Swift's international banking conference in Toronto rubbished the idea of any immediate uptake of large-scale blockchain applications in the banking business, citing "real-world" running costs and regulatory hurdles.
The reality check has yet to dim the enthusiasm of banks attending the conference to talk up their blockchain expertise and prowess, however, with a slew of announcements about new applications from the likes of JPMorgan, SocGen, IBM BBVA, and BNP Paribas dominating the public relations agenda.