Seven European banks join forces for blockchain platform for SMEs
Seven European banks – Deutsche Bank, HSBC, Natixis, KBC, Rabobank, Société Générale and UniCredit – have agreed in principle to develop a blockchain-based shared platform for domestic and international commerce for SMEs.
The memorandum of understanding (MoU), signed by all the parties above, will see “the development and commercialisation of a new product called Digital Trade Chain [DTC]” that will “harness the power of distributed ledger technology [DLT]”.
The product is based on a prototype trade finance and supply chain solution originated by KBC and tested to a proof of concept (PoC) stage.
The group hopes it “will simplify trade finance processes for SMEs by addressing the challenge of managing, tracking and securing domestic and international trade transactions. Larger companies use documentary credit as a way of reducing the risks involved in doing business, but documentary credit is not always suitable for SMEs or for companies that prefer open account solutions”.
The DLT technology “will accelerate the order-to-settlement process and decrease administrative paperwork significantly”, the group says.
It will also enable “end-to-end transparency”, which is hoped to boost SMEs’ confidence in onboarding new trade partners and thus grow trade across Europe.
The initial focus will be on seven European markets: Belgium and Luxembourg (KBC), France (Natixis and Société Générale), Germany (Deutsche Bank and UniCredit), Italy (UniCredit), the Netherlands (Rabobank) and the UK (HSBC).