Upon the completion and implementation of the joint project, the seven institutions will focus on implementing their Blockchain platform to optimize trade finance operations.
The platform, which is based on a technology called Digital Trade Chain hereinafter DTC developed by the Belgian bank KBC, is expected to settle both domestic and international transactions.
Creating a shared platform
DTC, the basis of the joint Blockchain platform, was awarded the Efma Accenture Innovation Award for best new product or service of 2016. Efma specifically praised the ability of DTC to seamlessly facilitate complex financial operations in a transparent ecosystem.
Koen Vierendeels, the KBC business unit manager of trade finance, stated:
“Thanks to Blockchain technology, we now have the possibility to create a shared platform where importers, exporters and their respective banks can digitally and securely finalize agreements and easily follow up the status of their trade transactions. By having all parties on one single platform every party can instantly follow-up the status of the transaction.”
Essentially, the aim of the project is to utilize DTC in optimizing the order-to-settlement process and substantially reducing costs dealt with by the banks in manually processing orders and transactions. By building a cross-bank platform, HSBC global head of product Vivek Ramachandran believes member banks will benefit from increased transparency and immutability.
“I believe trade is the perfect use case for distributed ledger technology. You want transparency, verifiability, and immutability of agreements and information,” said Ramachandran.
Another big contract for Belgium
Earlier this week, Cointelegraph reported that London formed a FinTech bridge with Belgium’s financial sector by signing a MoU. The goal of the agreement is to allow United Kingdom-based FinTech startups to communicate and collaborate with other companies in Europe.
At the time, Belgian finance minister Johan Van Overtveldt stated:
“London is the financial sector of Europe – there are a lot of infrastructures…there’s a huge talent pool that is there, there is the capital availability that is there, so of course even with Brexit, that won’t go away just like that. It’s an important change but we should not underestimate the resilience of London as a financial and FinTech center.”
The MoU between seven major financial service providers is another valuable contract for Belgium, specifically for its FinTech and Blockchain industries. The collaborative effort between the seven entities will open doors for startups and innovative Blockchain solution providers.