Hyperledger Promises Blockchain Debut in Trade Finance in 2017
Brian Behlendorf, the executive director of Hyperledger, strongly believes that Blockchain will make its debut in the industry of trade finance by the end of 2017.
Brian Behlendorf, the executive director of Hyperledger strongly believes that Blockchain will make its debut in the industry of trade finance by the end of 2017.
On March 14, the Linux Foundation-led Hyperledger Project promised the community to release a production-ready Blockchain protocol by the end of this month. Exactly 10 days after the announcement of Hyperledger, alpha release of the Hyperledger Fabric version 1.0, the open source software being developed by leading corporations and financial institution, was released.
Coincidental to the alpha release of Fabric 1.0, IBM announced the launch of its enterprise-grade Blockchain services deployed on top of the company’s cloud system. Marie Wieck, the general manager of IBM Blockchain, stated that the goal of IBM and other corporations utilizing Fabric 1.0 is to build robust Blockchain-based infrastructure for large-scale operations.
On March 24, Wieck wrote:
"IBM has applied decades of experience running the world's largest transaction systems for banks, airlines, governments and retailers, to build the most secure Blockchain services for the enterprise. IBM's Blockchain services are built on IBM's High-Security Business Network and designed for organizations that require Blockchain networks that are trusted, open and ready for business."
With IBM at the forefront of Blockchain development, the Hyperledger project intends to maintain the momentum of the foundation and introduce its production-ready Blockchain protocol Fabric to various industries.
Specifically, Hyperledger is planning to target the trade finance industry by offering a Blockchain-based platform that is capable of autonomously processing transactions, settling data points in real time and sustaining transparency at all times.
In an interview, Behlendorf stated:
“In trade finance, as I understand it, things aren’t really automated, and many of the deals made are based on paper and one to one relationships. You tend not to have market players that are so dominant they can dictate technology terms from top down, technology needs to be bottoms up, network based, that sort of thing. My hunch tells me that supply chain providence will drive a lot of interest in Blockchain technology. Trade finance will follow that because it benefits from the same types of automation: the collection of data and development of history that providence tracking provides.”
Scalability and convincing counterparties to engage in Blockchain activity
The vast majority of trade finance companies handle a wide range of services, including lending, issuing letters of credit, factoring, export credit and insurance. Because multiple institutions, partners and clients can be involved in a single activity or an operation, most companies within the industry maintain several databases or platforms to manage different types of data.
However, the goal of Hyperledger and other Blockchain organizations targeting the trade finance industry is to provide a single infrastructure that can handle all of the abovementioned operations. With the utilization of smart contracts, transactions, data settlement and agreements can be all settled autonomously, without the manual approval of respective counterparties.