A trade transaction on behalf of agriculture business Cargill has been successfully carried out using R3's blockchain platform, Corda. The transaction was payment for a bulk shipment of soybeans from Argentina to Malaysia, sold by the Geneva-based trading arm of Cargill to the company's Singapore subsidiary. The trade was done using a letter of credit, which was issued on Corda and was managed by two banks, HSBC and ING, on behalf of the two Cargill entities.
This is an important step towards making trade finance transactions on blockchain-based systems much simpler and faster, bringing the turnaround time for the transaction to 24 hours, compared to around a week for paper-based documentation.
Step closer to commercial trade finance on blockchain
HSBC's Vivek Ramachandran said: “The need for paper reconciliation is removed because all parties are linked on the platform and updates are instantaneous. The quick turnaround could mean unlocking liquidity for businesses.”
David E. Rutter, CEO of R3, added, “This transaction represents another major milestone for Corda as we work with the industry to make enterprise blockchain a reality in trade finance. Corda enables the development of applications like this one that bring all parties together on a single, shared infrastructure while ensuring the highest levels of privacy and security.”
And Cargill's regional treasurer for APAC, Rani Misra, explained that the company sees blockchain as a key technology, which it is also exploring and using with its customers. Misa said: “Simply put, we took a highly manual, complex transaction and made it more secure and efficient. We see the exciting potential of extending this technology into other areas of our financial ecosystem.”
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