Voltron trial highlights blockchain trade application
The Voltron initiative, built on R3’s Corda blockchain platform, has completed global trials that saw over 50 corporates and banks participate in the simulation of multiple digital letter of credit (LC) transactions across 27 countries on six continents.
Voltron uses blockchain technology to reduce the time it takes to execute the entire process of paper-based LC from 5-10 days to under 24 hours. 96% of participants in the trial said Voltron will accelerate their LC process, improve efficiencies and reduce cost.
Traditional trade finance processes are largely paper-based, time-consuming and prone to risk. According to a survey of trial participants, 86% of firms believe such inefficiencies are increasingly becoming ‘intolerable’ for both corporates and banks. As a result, 61% said they are likely to move trade flows to ‘open account’, a far more risky option for exporters.
Institutions including ABN AMRO, Alfa Bank, Banco de Crédito del Perú-BCP, Banorte, Bci, China Everbright Bank Hong Kong Branch, CIB, CommerzBank Commercial Bank of Qatar, Ekman & Co AB, LH TRADING, MUFG, Natixis, National Bank of Egypt, RBI, SABB, Scylla, Standard Bank, Societe Generale and The Saudi British Bank – SABB participated in the six week trial of the trade finance solution.
The trial was delivered by a partnership of Bain, CryptoBLK and R3 on Microsoft’s Azure cloud platform. This trial builds on a number of successful live transactions on Voltron in 2018 and earlier this year. The transactions demonstrated the improved speed and reliability of LCs.
The Voltron application designed and built to be compatible with both Corda and Corda Enterprise, will replace the complex links and networks involved in the trade finance market by providing a shared and synchronised database of transactions between businesses across the world. This digital alternative is significantly faster, more reliable and cost-effective than current paper-based systems, reducing fraud risk and removing time-consuming reconciliation processes by providing a single, immutable record of a trade.
