- IBM becomes the newest shareholder in we.trade, therefore taking 7% stake.
- This collaboration will enable the firm to achieve network enhancements and accelerate the global commercialization of its blockchain platform.
- we.trade which helps small and medium-sized enterprises get better access to trade finance, is backed by large European and Asian financial players like UBS, Deutsche Bank, and HSBC.
In the current unprecedented times where countries are witnessing a slump in business, improving access to finance is crucial for the recovery of economies worldwide. While many sectors are witnessing a much-needed digital disruption, the ongoing global epidemic has caused an added incentive for trade and supply chain companies to leverage technology. Enterprises globally are now open to form partnerships with platforms offering digitized services and business operations.
In fact, an IBM Institute for Business Value survey found that even though some organizations join a blockchain network to increase access to new markets and some deem better efficiency and seamlessness in financial processes and services, the end result is the same.
Unsurprisingly, over the last few months, blockchain-based trade finance network we.trade has seen an upward trajectory with respect to companies replacing paper based trade finance processes with a digitized solution, it said in a statement.
With the aim to strengthen its global presence, we.trade announced that it has added IBM as an equity shareholder alongside 12 existing bank shareholders.
This “enhanced collaboration” with IBM will enable we.trade to enhance its network and “accelerate the global commercialization of the platform,” it added.
Commenting on the new alliance, we.trade’s CEO Ciaran McGowan said: “Now we’ve got a very strong partnership with IBM for scaling globally and we are working closely together on Asia, Africa and Latin America.
“The enthusiasm for this platform underscores the need to continue to invest and expand access to a growing number of organisations.”
From July this year, the firm will offer its services banks and clients across Europe followed by a global expansion starting with Asia.
Simultaneously, the firm will continue to “interoperate with other distributed ledger-based trade finance networks.” It has already achieved progress with Hong Kong-based blockchain-based trade finance platform eTradeConnect which was formed by a consortium of 12 Asian banks.
Stressing on the importance of using blockchain, GM Blockchain Services at IBM Jason Kelley, commented:
“The strategic direction for we.trade and IBM is focused on driving growth and transparency across the entire trade ecosystem, collaborating to enhance the network effect of blockchain, and expanding access to trade finance and other services to the market place.
“Innovative technology and new pricing structures will help more banks align to internal production controls using their choice of cloud services. Meanwhile we.trade aims to help banks create new trusted trade corridors and expand markets by interconnecting with other regional trade services platforms.”
Helping supply chain companies smoothen trade processes
In terms of its technology, we.trade – which was formed by the association of 12 major banks with IBM as its original technology partner – utilities digital ledger technology to digitize the trade finance process.
Built on the newest version of the IBM Blockchain Platform and designed on Hyperledger Fabric, the firm essentially helps automate many tedious and time-consuming processes around trade finance and provides buyers and sellers with logistic services. Once registered on the network, users are able to make orders, manage the entire process until the payment and ensure they receive financing. Through the platform, clients can also discover new trading partners.
It is backed by some of the world’s top banks including CaixaBank, Deutsche Bank, Erste Group, HSBC, KBC, Nordea, Rabobank, Santander, Société Générale, UBS and UniCredit.
In August 2019, a Global Trade Review report said that we.trade had conducted an introductory bank transaction and HSBC became the first bank to use the blockchain platform to implement a trade finance transaction that occurred within the firm’s second pilot rounds which started in June last year.
This new addition in we.trade’s platform will undoubtedly form the foundation of the firm’s vision for future collaborations with other established networks.