LBBW and Commerzbank together have reached a milestone in the digitisation of commercial transactions based on distributed ledger technology (DLT). In order to secure payments from two commercial transactions, the necessary data transfer between corporates Voith and KSB was carried out digitally for the first time and processed using Marco Polo on R3’s Corda blockchain platform.
As part of a pilot project, two commercial transactions between the international technology group Voith, and the pump and valve manufacturer KSB SE were mapped using blockchain technology. One transaction involved the delivery of special hydraulic couplings from Germany to China and the other the delivery of pumps within Germany.
In the transactions, order and delivery details were agreed between the companies via the Marco Polo network and the payment term was secured by a conditional payment commitment from the buyer’s bank. After delivery, the corresponding delivery details were entered into the network and automatically matched with previously agreed data, triggering an irrevocable payment obligation on the part of the buyer’s bank. The overall flow of information was efficiently and transparently mapped by R3’s Corda blockchain platform.
The DLT platform from Trade IX, the technology partner for the Marco Polo network, makes it possible to secure the transaction by a payment commitment through the digital exchange of trade data, which can also be financed on behalf of the supplier by the supplier’s bank. Financing was also part of the pilot transaction.
In the wake of the successful pilot project, the next step will focus on the complete execution of transactions via the Marco Polo network with a direct connection to the customers’ management systems (ERP integration) in order to offer customers a seamless process. Going forward, the network plans to add further banks and participants from the transportation and insurance sectors so that the entire value chain for foreign trade transactions is represented digitally with data.