The Marco Polo project for open account trade finance has successfully completed its biggest trade finance trial on the R3 Corda blockchain platform.
More than 70 organisations participated in the seven-week-long trial, including banks and corporates from over 25 countries and across multiple sectors including financial services, IT and telecoms, logistics, maritime, real estate, hospitality and the automotive industry.
These included ABN Amro, Banorte, BMW, Citizens Bank, Commerzbank, International Islamic Trade Finance Corporation (ITFC), SBI, Steelforce, SüdFactoring (a subsidiary of LBBW), Sumitomo Corporation, the Bank of East Asia and SABB, all of which trialled working capital applications with a focus on the network’s receivables finance solution. The aim of the receivables finance solution is to optimise companies’ working capital, mitigate credit risk and improve liquidity.
Launched in September 2017, Marco Polo is a technology project led by TradeIX and a consortium of banks to build an open account trade finance platform powered by R3’s Corda blockchain framework. The project completed its first proof of concept in February 2018 and has since grown to be the largest and fastest-growing trade and working capital finance network in the world, says the consortium.
The network is live on R3’s Corda, with members of Marco Polo now gearing up for production. The project had originally expected to move into production by early-2019, but this date was pushed back to the latter half of the year, TradeIX declined to comment on the reason for the delay in a previous interview. A spokesperson for TradeIX tells GTR that, as of October 8, the platform is live and available for banks to on-board their clients. “We started with the receivables financing solution and are releasing other trade finance modules such as payment commitment and accounts payable financing in the first months of next year.”
Hyperledger Fabric-based we.trade, a rival blockchain platform also addressing open account trade finance, is already in production with 14 banks across Europe, GTR reported earlier this year.
The network completed its first live commercial trade finance pilots in March, whereby German banks Commerzbank and LBBW used the platform for two commercial transactions between technology company Voith and pump and valve manufacturer KSB. It facilitated another live pilot, involving Bangkok Bank and Commerzbank in May, which saw payment secured via Marco Polo for a trade exchange between German glass manufacturer Schott (the exporter and client of Commerzbank) and Thai packaging manufacturer APA Industries (the importer and client of Bangkok Bank).
The most recent bank to join Marco Polo is BNY Mellon, in November. The full list of financial institutions involved in the trade finance initiative are: Alfa Bank, Anglo-Gulf Trade Bank, Bangkok Bank, Bank of America, Bayern LB, BNP Paribas, Bradesco, Commerzbank, Danske Bank, DNB, Helaba, ING, Intesa Sanpaolo, LBBW, National Australia Bank, National Bank of Fujairah, Natixis, NatWest, OP Financial Group, Raiffeisen Bank, SMBC, Standard Chartered Bank, Standard Bank and S-Servicepartner.