Commerzbank and İşbank have completed a live, commercial pilot transaction over the Marco Polo platform for open account trade finance as the project moves closer to going fully live this year.

The transaction involved the export of laminated glass interlayers from German firm Kuraray Europe to Turkish company Şişecam.

The companies digitally processed the order and delivery details via Corda blockchain technology on the Marco Polo trade finance network, and the buyer’s bank, in this case İşbank, provided a conditional payment commitment. After delivery of the goods, the buyer entered delivery details onto the platform, which was automatically matched with previously agreed data. This finally triggered an irrevocable payment obligation on the part of the buyer’s bank, which not only serves as a risk mitigation instrument, but also provides financing.

The trade transaction data was only distributed to the parties along the workflow of the trade, making the settlement processes quicker and more efficient than the traditional set-up involving several intermediaries and a large number of physical documents.

“After having processed various Marco Polo payment commitment pilot transactions last year, we are now very happy to have piloted with İşbank an advanced pre-live version of the platform,” says Enno-Burghard Weitzel, head of trade product management at Commerzbank.

According to Commerzbank, this transaction marks the first ever Turkish-German transaction via the trade finance network, and the first time a Turkish bank has performed a trade finance transaction using distributed ledger technology (DLT).

Launched in September 2017, Marco Polo is a technology project led by TradeIX and a consortium of banks to build an open account trade finance platform powered by R3’s Corda blockchain framework. The aim is to simplify and speed up the processes behind open account trade finance services throughout the trade cycle, with receivables finance and payments commitments being the first products tested on the platform.

The project completed its first proof of concept in February 2018, and since then more than 30 banks have signed up to the initiative. Last year, the project carried out its biggest trade finance trial with over 70 organisations, including corporates and financial institutions. Marco Polo is now on track for full commercial release, with Robert Barnes, CEO of TradeIX, telling GTR in January that the platform has “over 30 banks and transactions ready to start going live in quarter two”.