Sumitomo Mitsui Banking Corporation (SMBC), the third largest bank in Japan in terms of assets, will launch blockchain-based trade finance services in the second half of this year.
SMBC Deputy Chairman Yasuyuki Kawasaki announced the news at a recent fintech seminar in Tokyo, saying that the bank will provide new services for importing companies and exporters using the Marco Polo blockchain trading financing platform.
Kawasaki said that traditionally trade finance is a “very difficult” paper-based and lengthy process. SMBC completed a concept check using the blockchain platform in February to improve its trading operations. At the time, it was said that the platform "provides paperless real-time communication and easier access."
In the Marco Polo network, built on the launch of block3 software on the Corda R3 platform, the first real transactions were launched last month. The network was founded by R3 and TradeIX Trade Finance Specialist.
Transactions took place between two German companies. One deal involved the delivery of special hydraulic couplings from Germany to China, and the other with the delivery of pumps within Germany.
Since its launch in 2017, several major financial institutions have entered the Marco Polo network, including ING, BNP Paribas and Commerzbank.
Announced this morning, BayernLB, Helaba and S-Servicepartner also joined the Marco Polo network “for piloting and evaluation purposes”.
Daniel Cotti, Managing Director of the Center for Excellence in Banking and Commerce for Marco Polo, said:
“Today we have the resources and technology to change the way banks serve their trade-financing customers and facilitate access to loans, minimizing risks and increasing transparency.”
Trade finance is increasingly seen as a lucrative use of blockchain technology. In July last year, another trade finance blockchain platform called We.Trade was launched, based on Hyperlinks Fabric.