R3’s Marco Polo Runs Largest Trade Finance Trial With Over 70 Members

The Marco Polo Network, a trade finance network co-developed by major enterprise blockchain firm R3, has completed its largest finance trial.

Built on R3’s open-source blockchain platform Corda, Marco Polo has hosted the largest global trade finance trial that involved over 70 organizations from 25 countries including financial giants like Japanese SBI Holdings, according to an official announcement on Dec. 12.

100% of respondents in the trial believe that blockchain has the potential to improve their industries

As the trial has involved more than 340 participants from multiple industries ranging from financial services to automotive, the joint initiative purportedly intends to improve trade finance and working capital solutions in a number of industries. Other industries included telecoms, logistics, maritime, real estate, and hospitality.

100% of respondents surveyed as part of the pilot claim that trade finance and working capital tools based on blockchain have the potential to accelerate the receivables discounting process and reduce costs for both banks and corporates. Meanwhile, 75% of respondents believe that this will happen within five years, the press release notes.

Marco Polo co-developer TradeIX provided working capital applications for the trial

The Marco Polo Network-based blockchain open account trade finance trial deployed working capital applications developed by Irish tech firm TradeIX with a focus on the receivables finance solution. Also known as factoring or receivables discounting, receivables finance is a type of receivables purchase that enables firms to optimize their working capital, mitigate credit risks and improve liquidity. The trial took place over a seven-week period.

Banks participating in the joint trial included major Dutch bank ABN AMRO, Mexican banking and financial services firm Banorte, Citizens Bank, Commerzbank AG, SBI Holdings, the Bank of East Asia and the Saudi British Bank. Other participants included major German carmaker BMW, SBI R3 Japan, the International Islamic Trade Finance Corporation, Japanese general trading company Sumitomo Corporation, and financial services institute SüdFactoring, which is a subsidiary of German bank Landesbank Baden-Württemberg.

Munetoshi Yamada, director of business development at SBI Holdings and SBI R3 Japan, expressed confidence that Marco Polo will change the “traditional bank-corporate relationship in an innovative way to make the real multi-bank platform happen.”

As reported, Marco Polo is a consortium of major global financial and banking institutions aiming to streamline international trade. Launched in 2017, the  Marco Polo Network is a collaboration of R3 and TradeIX, and comprises of 31 members to date, including financial firms like French BNP Paribas, Dutch ING Japanese MUFG, Bank of America and French Credit Agricole.

In late November 2019, Marco Polo was joined by major American banking and financial services firm, the Bank of New York Mellon.