Depending on whom one wants to believe, the world’s first trade transaction using blockchain technology may have been executed. Several sources claim Barclays and an unnamed Israeli startup have collaborated on this project. As a result of this effort, the typical transaction time of 7-10 days was reduced to four hours.
Barclays is one of the many financial players focusing its attention on blockchain technology today. Their field test, which saw US$100,000 worth of cheese and butter transferred from Ornua to the Seychelles Trading Company, was a great success. The team used a blockchain platform set up by Wave, a company that was nurtured during Barclays’ accelerator.
Barclays Taps Wave For Blockchain Solutions
With an electronic form of recordkeeping and transaction processing, blockchain is a golden goose for the financial world. All parties can track the progress of a transfer by using a secure network. More importantly, the blockchain removes any need for third-party verification. The contrast with the current paper-heavy process could not be more different.
Barclays Global Head of Trade Baihas Baghdadi stated:
“We’ve proved the reality of this technology and the client, Ornua, has asked us when they can do the next transaction in this way, which proves how user-friendly the entire process was. I’ve been here for more than two decades and I never even dreamed of a solution where you can remove completely the documents from the circle and just get everything moving around the world on an electronic basis within minutes, rather than days of couriers and shipping and all that.”
Similarly to most blockchain field trials these days, this transaction between Ornua and the Seychelles Trading Company was executed through a letter of credit. By using this medium, the risk factor between importers and exporters is reduced significantly. All critical information – shipping and insurance documents, for example — had been cryptographically sealed on the blockchain platform.
In this digital age, it makes a lot of sense to move away from paper-based trials and administration. Not only would it reduce costs, but it will eventually create error-free documentation. This will, in turn, speed up the whole process for all parties involved. There is no reason not to get involved in blockchain right now.
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