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R3 makes inroads in digital trade

DLT and blockchain software development company R3 has increased its involvement with digital trade and supply chain solutions in the past week. First, the company announced an agreement with E-Title Authority, a Singapore-based software developer, to acquire its legal and technological framework for digitalisation of Bill of Lading, the central title document underpinning trade operations globally.

The acquired framework will be used to roll out an electronic Bill of Lading (eBL) solution powered by Corda, R3’s enterprise blockchain platform. The eBL toolkit, natively built on Corda, will enable operational optimisation opportunities for R3’s clients in the trade and trade finance industries.

Dorothy Lim, CEO of E-Title Authority, commented: “the company has developed a robust legal framework for eBLs, accepted by the International Protection & Indemnity Club, the global insurance association comprising over 80% of the marine insurance market crucial for trade operations. R3’s enterprise-grade technology provides a perfect base to realise our product vision for eBLs, as well as extend the full value of the developed legal framework to a broad range of global trade players.”

“Our technology, combined with E-Title Authority’s legal framework, allows us to create a powerful tool to accelerate international trade digitalisation and to streamline logistics and financial supply chain trade processes," added David E. Rutter, CEO of R3. "This solution will enable seamless integration with the existing vast Corda-powered trade finance and supply chain ecosystems.”

Finding a fully digital solution

Despite the near universal reach of the internet and the acceptance of digital signatures as legally binding, most trade partners continue to create and exchange paper documentation. Title and negotiable documents, such as the bill of lading, are some of the most critical documents for trade, allowing goods to be exchanged for payment and enabling companies to obtain financing.

Technology companies have struggled to offer fully digital trade solutions, in part, because of the difficulty of establishing a proper legal basis for electronic negotiable title documents. As a result, most existing solutions are partially digitalised, diminishing the potential value proposition for banks, corporates, carriers, and other trade and supply chain participants.

R3’s eBL toolkit will provide Corda Enterprise customers with an opportunity to fully digitalise the negotiable title document exchange and management. It will also enable technology companies to lower the cost of utilising negotiable title documents, accelerate their go to market efforts, and enable the peer-to-peer transfer of eBL across parties, applications, and business networks.

Developing a network for global supply chains 

Elsewhere this week, Mphasis, an IT solutions provider specialising in cloud and cognitive services, has announced a partnership with R3 to jointly create blockchain-enabled payment solutions and take them to market. Leveraging Corda, Mphasis is strategically extending its payments and trade finance technology solutions portfolio. 

The partnership will focus on the acceleration of ALTA, the digital payments and supply chain finance ecosystem formed by Mphasis to connect global enterprises, their supply chains, and a wide range of financial services and infrastructure providers into a modern value transfer network for global trade. The solution will provide Mphasis customers with access to a suite of next generation payments, working capital, and foreign exchange services that can be deployed on Corda. 

Recent events have highlighted the critical role that financial resilience plays in the sustainability of every supply chain, and the structural gaps that still exist in how financing is traditionally deployed. The collaboration with R3 is designed to allow small and medium sized businesses - who are typically the weakest link in most supply chains - to easily and digitally access working capital and other financial services that will help bolster and strengthen the entire supply chain. Due to the scalability, low-latency and encrypted environment in which Corda operates, the solution is optimised for business cases requiring institutional grade controls in reliability and availability. 

“Through the ALTA Payments Innovation Program - a part of the Sparkle Innovation Lab - we have been working on various ways to transform traditional trade assets into tokenised, liquid instruments that can serve as the basis for a new digital, networked value transfer ecosystem,” said Srikumar Ramanathan, SVP and global head - Industry Solutions Group (ISG) at Mphasis. “The partnership with R3 will allow us to accelerate co-development and go-to-market on the Corda platform.” 

By implementing a network-based model in what has traditionally been a linear, point-to-point approach, enterprises and their supply chains can unlock much needed working capital, while banks and financiers can increase return on risk weighted assets (RWA) and scale supplier adoption. 

“To support a meaningful and sustainable re-activation of global supply chains, we must embrace more flexible, efficient, and resilient models that enable a higher level of visibility and collaboration between banks, buyers, and suppliers," said Dorothy Copeland, global head of Alliance and Ecosystems at R3. "We are thrilled to be working jointly with Mphasis to create innovative blockchain-based payments solutions.”

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