IBM Joins 12 Banks Backing Blockchain Startup We.Trade
Can innovation in cloud technology, digitization and blockchain make a difference in how retail markets stock shelves? Time will tell, blockchain is new and not widely used in supply chain today. But that could be changing – investment in the fledgling technology by large organizations continues to grow.
We.Trade is a blockchain trade network designed on Hyperledger Fabric that connects buyers and sellers internationally. The pandemic has laid bare weaknesses in our supply chains and international trade networks. Big companies are investing in what they think is an opportunity in supply chain innovations.
Sounds simple, but during Covid-19 restrictions on business and social interaction, goods bound for retail markets have been delayed in port or stopped because of manual-paper based limitations. We.Trade wants to connect small and medium businesses to banks, streamlining paper-based transaction tasks like letters of credit and the financing involved in cross-border and international trade. Smart contacts, the building blocks of blockchain technology, record and show every transaction by individuals on a network. Networks based on technology, like Hyperledger, Ethereum, Symbiont and others, create an environment where companies share information and verify each other during a trade. Technology like blockchain is considered by its believers to speed-up and consolidate manual tasks.
Starting July 2020, We.Trade will extend services to new banks and clients across Europe before expanding the network globally, beginning with Asia. Another finance platform, eTradeConnect, formed by 12 Asian banks, will connect with We.Trade to extend its network effect.
“Having now satisfied the legal, security, compliance and integration requirements of 16 of the biggest banks in Europe, we.trade is moving towards full commercialization as banks start to onboard at least 10% of their client bases onto the network in the coming months,” said Ciaran McGowan, CEO we.Trade. ” Small to mid-size enterprises and small corporates have historically had the least access to liquidity and technology services in commercial trade. It is quite special to see competitor financial institutions collaborating to create better services and innovative financial offerings for these companies. Insurance services, integration to accounting systems, and interconnectivity to global platforms will further enhance the experience for these types of businesses.”
“Businesses around the world have been affected by the Covid-19 crisis, but it will be small to medium-sized businesses and businesses with exposure to the international trade and financial systems that are affected the most,” said Parm Sangha, IBM Global Blockchain Leader, Trade Finance. “These companies have less reach into major financial institutions and are more likely to be over-burdened by trade frictions like customs and paperwork. The aim of we.trade is to simplify and digitizing these processes to help these businesses rebuild and grow in the post-Covid-19 world. Blockchain technology remains unique in its potential to diminish frictions in global business, reduce cost, and save time while also mitigating risk and creating new business models.”
We.trade is backed by CaixaBank, Deutsche Bank, Erste Group, HSBC, KBC, Nordea, Rabobank, Santander, Société Générale, UBS, UniCredit and IBM are shareholders in we.trade while UniCredit AG in Germany, EuroBank in Greece, and ČSOB, Komerční Banka and Česká Spořitelna in the Czech Republic are licensees.