Today the Voltron Initiative announced the completion of a six week trial of its Letter of Credit blockchain with more than 50 banks and corporates, of which at least 20 were financial institutions. The blockchain network succeeded in reducing the process from 5-10 days to less than 24 hours.
In addition to speeding up the process, it eliminates time-consuming reconciliations and helps to combat trade finance fraud.
Voltron surveyed the trial participants, 96% of whom stated that Voltron would “accelerate their Letters of Credit process, improve efficiencies and reduce cost.” Because 86% of firms are finding inefficiencies intolerable, 61% are likely to move to open account trade finance.
Denis Dodon, Head of CIB Innovations at Alfa Bank liked the holistic view provided by Voltron. Because information is shared instantly, discrepancies can be identified and rectified quickly.
Hong Kong-based CryptoBLK is the developer and Bain is consulting.
“The trial has been a great collaboration between banks and corporates, R3 and CryptoBLK and it ensures a better understanding of the possibilities and benefits of Voltron: the end-to-end digitization of letters of credit,” said Chris Sunderman, blockchain initiative lead, trade finance, at ING. “This will help in broadening the support base of Voltron and it will grow a larger and geographically well spread network of banks to adopt it, enabling an increased number of transactions in the production phase.”
The founding Voltron member banks are Bangkok Bank, BNP Paribas, CTBC, HSBC, ING, Natwest, SEB and Standard Chartered. For the trial they were joined by another 19 banks: ABN AMRO, Alfa Bank, Banco de Crédito del Perú-BCP, Banorte, Bci, China Everbright Bank Hong Kong Branch, CIB, Commerzbank Commercial Bank of Qatar, Ekman & Co AB, LH TRADING, MUFG, Natixis, National Bank of Egypt, RBI, SABB, Scylla, Standard Bank, Societe Generale and The Saudi British Bank.
There are four major international trade…