HSBC and ING Bank have successfully executed a live trade finance transaction for international food and agriculture conglomerate Cargill using R3’s Corda scalable blockchain platform.Involving a bulk shipment of soybeans from Argentina, the blockchain transaction had Cargill’s Singapore subsidiary as the purchaser and a Letter of Credit issued using Corda by HSBC to ING, both banks acting on behalf of the Cargill entities.
The Letter of Credit transaction was an end-to-end trade completed on a single shared application rather than multiple systems, which demonstrates blockchain as a solution that promotes digitization and efficiency while being commercially and operationally viable. Legacy paper-based documentation usually takes between 5-10 days, while the blockchain-based system took 24 hours.Vivek Ramachandran, head of growth and innovation, at HSBC, commented:
“What this means for businesses is that trade finance transactions have been made simpler, faster, more transparent and more secure. The need for paper reconciliation is removed because all parties are linked to the platform and updates are instantaneous. The quick turnaround could mean unlocking liquidity for businesses”.
Rani Misra, Regional Treasurer, APAC at Cargill, said:
“Cargill believes blockchain can help our company nourish the world in a safe, responsible and sustainable way. Therefore, it’s a key technology we are exploring and using with our own customers and, now, using for ourselves with the completion of this transfer on Corda. 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.”
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 brings all parties together on a single, shared infrastructure while ensuring the highest levels of privacy and security.”
Ivar Wiersma, Managing Director, Innovation Wholesale Banking, ING, said:
“It’s exciting to see this transaction has been completed successfully with clear client benefits in speed and ease in execution. On top of that, it shows the power of collaboration. Collaboration with other ecosystems’ stakeholders like regulators, ports, customs and logistics providers such as large shipping carriers. And in particular, collaboration with other banks, even our peers.”
R3 is looking to expand the network on an open basis to drive adoption across the industry.
