Blockchain in financial services

Anatomy of an intelligent blockchain trading solution

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shipping is a digital platform that helps buyers and sellers trade across borders in a new way. Powered by the IBM Blockchain Platform from the cloud, it ensures that traders can trust the other party and streamlines trading transactions.

Why is needed? Without financial guarantees, trading with new partners creates huge counterparty risks. Would-be traders may be short of capital. Price negotiations and other manual processes, such as logistics and insurance, are slow and error prone. And cross-border traders have to deal with geopolitical crises, trade wars, regulatory compliance and currency conversions.

Banks that facilitate trades through letters of credit and financing also face difficulties. Generally lacking digital trade services, they instead rely on slow and costly manual processes. This hinders trading for customers and prevents banks from making the most of international commerce. For insurers and logistics organizations, is a key opportunity to further integrate their service offerings into the trade ecosystem, and acts as a welcome new channel to market.

Cross-border trading simplified through an ecosystem network

In the past, such challenges caused many businesses to avoid cross-border and domestic trading altogether, especially those that aren’t trade specialists. But now the platform provides an intelligent digital solution.

Founded by a consortium of major banks in Europe and live since January 2019, connects buyers, sellers, banks, insurers and logistics organizations in a network that simplifies cross-border trading. Key benefits include reducing counterparty risk, automating transactions and integrating the end-to-end trade ecosystem.

Member banks bring buyers and sellers to the network after vetting them through Know Your Customer processes. This eliminates concerns about money-laundering, financial viability and counterparty risk. Once in the network, traders can initiate orders, manage the order-to-payment process and attain financing without worrying about legal, regulatory and currency issues. They can also search the network to discover new partners.

Trusted, secure and intelligent with blockchain

Based on open source Hyperledger Fabric from The Linux Foundation, is a perfect use case for blockchain. Every transaction is recorded using distributed ledger technology (DLT), a secure, shared database with no single point of failure. Each entry on the blockchain is given a timestamp and a unique cryptographic signature, and all permissioned parties can access the same information concurrently for complete transparency.

Blockchain smart contracts add intelligence to They guarantee that if one party in a transaction fulfills its part of the deal, as agreed to and recorded in the blockchain, the contract will automatically trigger an action — such as sending a payment. If smart contracts are integrated with the Internet of Things, they can initiate payments when, for example, an instrumented shipment leaves the factory or reaches a loading dock.

An agile development process for a quick start

Blockchain technology is only part of the story. Working with IBM Services, we brought the platform to market quickly using iterative and agile development processes.

A key was narrowing our focus to do one thing really well: developing the network of members, buyers and sellers and the intelligent transaction capabilities. Then, we proceeded in steps, first creating a minimal viable network and then a pilot project a few months later. Only after absorbing considerable user feedback did we move into production.

Today,’s transaction volume is surging and we’re growing the network by adding more banks along with insurers and logistics companies. Even global expansion is possible through integration with other trading networks, particularly those built on Hyperledger Fabric.

Although is a commercial consortium, I especially like the altruism. It improves how buying and selling works and levels the field for the little guy. And by opening up international commerce to more players, will stimulate the economy for the greater good.

From time to time, we invite industry thought leaders, academic experts and partners, to share their opinions and insights on current trends in blockchain to the Blockchain Pulse blog. While the opinions in these blog posts are their own, and do not necessarily reflect the views of IBM, this blog strives to welcome all points of view to the conversation.

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