HSBC, Societe Generale, UniCredit and other banks launch blockchain trade finance solution

16 January 2017

In a move to help small and medium sized businesses across Europe seven largest banks are uniting their efforts to collaborate on a joint project powered by the blockchain technology. Memorandum of Understanding was signed by Deutsche Bank, HSBC, KBC, Natixis, Rabobank, Société Générale and UniCredit in Brussels this week.

Under the terms of the new MoU the banks will be working over the launch of Digital Trade Chain (DTC) that will be based on the proof-of-concept type of trade finance and supply chain platform initiated by KBC.

The new product will be introduced to streamline the process of trade finance for SMEs tackling a number of issues related to management, tracing and protecting the inland and global transactions by linking all stakeholders and devices, both online and mobile.

Conventionally major companies rely on documentary credit as an option to reduce risks associated with their businesses but this option is often disadvantageous for small and medium sized enterprises which give their preference to open account procedures.

According to the statement made by the largest seven European banks, the secure records on a distributed ledger DTC platform is developed to simplify the transaction process while reducing the paperwork. Initial plans of the association of the banks under MoU are to build critical mass in seven European markets.

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