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Barclays and Israeli start-up Wave are claiming the world’s first real live trade financing deal via blockchain. The $100,000 letter of credit backs the export of dairy products by Irish agricultural food cooperative Ornua to the Seychelles Trading Company and is the first to have trade documentation handled on the new Wave platform, with funds sent via Swift.
According to Gadi Ruschin, CEO at Wave: “Effective use of blockchain technology really can have a huge impact on the future of trade. By adopting our system, trade can be done more easily and more cheaply. Studies show that as much as 5% of the cost of a trade transaction comes from the handling of documentation, so there is a significant opportunity to improve this element of the trading process."
Barclays and Wave now plan to work with a larger group of trade finance clients to develop the service further. But the pairing are not the only developers in the trade finance space with proof-of-concept in place. On August 10, both R3 and a consortium comprising HSBC, Bank of America Merrill Lynch (BAML) and Infocomm Development Authority of Singapore (IDA) announced separate proof of concepts for essentially the same thing – automated letters of credit (L/C).