CBA and Wells Fargo in “world-first” interbank blockchain trade transaction
Commonwealth Bank of Australia (CBA), Wells Fargo and trading firm Brighann Cotton have completed the “first” global trade transaction between two banks using blockchain, smart contracts and the Internet of Things (IoT).
The transaction involved a shipment of cotton from Texas to Qingdao, China, using a distributed ledger – Skuchain’s Brackets system – for all parties.
Cameron Austin, general manager of Brighann Marketing, says the combination of these emerging technologies “could eliminate many inefficiencies currently experienced in international trade” and bring the “benefits of lower costs and improvements to security through reduction of errors, risk and time”.
The trade involved an open account transaction, mirroring a letter of credit, executed through a collaborative workflow on a private distributed ledger between the seller (Brighann Cotton in the US); the buyer (Brighann Cotton Marketing Australia); and their respective banks (Wells Fargo and CBA).
Thanks to this blockchain success, CBA and Wells Fargo say they will continue working with trade finance clients, consortiums like R3, and the other usual suspects.