Barclays, the UK banking company, teamed up with an Israeli startup to carry out the bank’s first Blockchain-based trade transaction. This allowed Barclays to send a transaction within minutes, both cost effectively and securely, rather than using the traditional transaction process which normally takes hours or days.
According to Barclays, the transaction was approximately $100,000 worth of dairy products from an Irish food company, Ornua to the Seychelles Trading Company.
Baihas Baghdadi, Barclays' Global Head of Trade and Working Capital, states:
"We've proved the reality of this technology and the client, Ornua, has asked us when they can do the next transaction in this way, which proves how user-friendly the entire process was."
Barclays and Wave
Barclays used a Blockchain by Wave, a startup that went through the Barclays’ Blockchain accelerator program. Wave’s platform gave Barclays the chance to work with an easy-to-use Blockchain interface to conduct the trade between the two parties without potential transaction manipulation.
The transaction itself was for trade documents between Ornua and the Seychelles Trading Company to place the transaction onto the Blockchain for the record.
Barclays wrote in the press release:
“The new Blockchain-based system developed by Wave uses distributed ledger technology to ensure that all parties can see, transfer title and transmit shipping documents and other original trade documentation through a secure decentralised network, eliminating many of the current inefficiencies in international trade.”
Other banks working on the Blockchain
The UK-based bank is not the first to experiment with Blockchains for fintech. Both HSBC and Bank of America Merrill Lynch reported that they are also testing Blockchain-based banking for faster and more cost-effective transactions.
Gadi Ruschin, CEO of Wave, adds:
“Effective use of Blockchain technology really can have a huge impact on the future of trade. By adopting our system trade can be done more easily and cheaply. Studies show that as much as 5% of the cost of a trade transaction comes from the handling of documentation, so there is a significant opportunity to improve this element of the trading process. We think we’ve got the right answer, and look forward to working with Barclays to develop it further and create an industry-wide solution.”