BBVA has taken a leading role in the race for blockchain adoption in trade finance, having successfully piloted Wave’s blockchain solution for paperless trade.

It is the first bank to complete a live pilot with the Israeli fintech firm since Barclays last year received wide attention for being the first-ever bank to use blockchain technology in a live trade transaction.

Wave was one of 11 companies to go through Barclays’ accelerator programme in 2015. Its service allows for the digital exchange and management of all shipping and trade-related documents through a secure decentralised network.

Last week, the company announced it had kicked off a new round of live pilots after having spent the last year developing its product with feedback from a large number of players in the international trade ecosystem.

BBVA’s pilot was run on a letter of credit transaction with Frime, a Spanish company, which bought more than 25 tonnes of frozen tuna from Pinsa Congelados, a Mexican firm.

A letter of credit transaction usually takes between seven and 10 days to process. The large volume of documentation required entails often error-prone processes such as manual checks and sending physical documents.

Using Wave’s system, BBVA was able to send, verify and authorise a trade transaction between the two companies in just 2.5 hours.

In a statement, BBVA’s head of global trade and international banking, Patxi Fernández de Trocóniz, says the pilot “represents a leap forward in improving the efficiency of international trade transactions”.

Thanks to blockchain technology, all parties (the banks, the importer and the exporter) had constant transparency of the status of the documents and could make necessary changes or corrections throughout the transaction – from the time the goods were loaded until their arrival at the destination. The pilot included the electronic signature of documents, the simultaneous distribution of copies to all parties and the reception of the ownership of the documentation at each step along the way.

The transfer of funds, however, was done via traditional routes – using Swift. Nevertheless, BBVA says that blockchain “could be applied to the final credit card payment and even to the prior procedures and financing of the operations”. In addition to the pilot with Wave, BBVA has also conducted others for currency conversions and international transfers. In April, for example, it completed a transfer using Ripple’s blockchain payments service, also in a transaction between Spain and Mexico.

Another six banks are lined up for live pilots with Wave in the near future. With this, Wave has taken one step closer to releasing a commercial blockchain-powered product for paperless trade.

Its first successful pilot was announced last week, but didn’t include a bank. It involved Israeli shipping company ZIM and Hong Kong-based logistics firm Sparx Logistics, and tested specifically the issuance and transfer of bills of lading.

“With Barclays, it was a live transaction with all documents submitted through Wave,” Gadi Ruschin, Wave’s CEO, told GTR last week. “However, it was in the very early days – it was a race to prove that it can work in a live environment. It was done on the most basic Wave application, which was not even considered to be a product. Since then, the application has evolved and we are now very happy to take the next step forward and expand the testing.”

He added that the next version of Wave, which will be a commercial product, will be released in the coming months.

“It will have a nice interface and be much more robust. After that, we will start promoting the brand and create as many success stories as possible. When we believe it is tested enough in order to go full-scale to the market, then we start our go-to-market process.”

The aim is for this to happen by mid-2019, he said.