Twelve banks are working with software firm R3 and TradeIX, a trade finance technology company, on a blockchain initiative to change the infrastructure of open account trade finance. The system is an end-to-end open account trade finance business network which will be powered by TradeIX and R3’s Corda distributed ledger platform.

In its announcement, the group said that the project would initially create standard trade finance smart contracts on a distributed ledger infrastructure. It stated: “This provides secure and automated financing of supply chain using a single record for critical trade data including identities, purchase orders, invoices, shipping and logistics information, trade assets, financing activity, credit risk, and more. Following this phase, R3 and TradeIX will engage the broader ecosystem, expanding services and onboarding additional members.”

The product will include trade-specific APIs and technology tools, as well as “a sophisticated rules engine, and an open, standard core infrastructure for trade data, contracts, and transactions”. It will integrate with existing platforms as well as R3 and other ecosystems.

David Rutter, CEO of R3, comments: “Earlier this year R3, TradeIX and a core group of R3 members teamed up to redesign the infrastructure behind open account trade finance utilising our Corda platform and the TIX-Platform of TradeIX. Existing trade finance infrastructure is in serious need of an upgrade, and this project is a big step towards the adoption of reliable, efficient and standardized processes for the entire sector.”

The banks involved in the initiative are: Bangkok Bank, Barclays, BBVA, Bladex, BNP Paribas, Commerzbank, CTBC Bank, ING, Intesa Sanpaolo, Shinhan Bank, Royal Bank of Scotland and Wells Fargo.