One of the world’s largest business networks has teamed up with a fintech startup to develop a blockchain-powered marketplace for supply chain finance.

OpenText, a Canadian firm that operates a business network of more than 600,000 companies, has partnered with UK-based BlockEx, a provider of a blockchain-based digital asset exchange, to explore the use of blockchain technology across the supply chains of the OpenText network and how it can help facilitate firms’ access to finance.

“Our partnership allows some of the world’s largest supply chains to simply opt-in to blockchain-based trade finance,” says Adam Leonard, CEO of BlockEx, calling the move “truly exciting”.

Also commenting on the new partnership in a blog post, Mark Morley, who is director of strategic product marketing for business network at OpenText, says the two parties will jointly develop solutions to provide increased visibility of the end-to-end supply chain information flow, which can help lenders monitor supply chain events, such as disruptions or late delivery of shipments, to evaluate vendor risk more effectively. Lenders will also be able to identify when assets have been pledged as well as extend their offering to pre-delivery financing. Finally, a blockchain-based solution can prevent fraudulent invoices from entering the supply chain.

“Blockchain is ideal for traceability use cases within the supply chain, especially where raw materials need to be tracked from source to final destination,” Morley writes. “Born out of the financial services sector, blockchain stands to transform the way in which companies engage with trading partners across a supply chain.”

As previously reported by GTR, blockchain is well suited for tracking and tracing the physical supply chain. The technology ensures that records cannot be duplicated, manipulated or faked, and because it allows data to be entered, shared and viewed across the supply chain, the goods’ journey from farm to plate is immediately visible and transparent to all parties. Some fascinating developments are already underway, including projects that use blockchain technology to trace diamonds, wine, coffee beans, cotton, avocados and fish.

The ability to monitor goods securely also makes blockchain technology ideal for managing the end-to-end supply chain finance process.

“Supply chain finance is a great use case for blockchain as the process needs to effectively manage the orchestration of transactions between buyers, suppliers and lenders, as well as other businesses such as third-party logistics carriers involved with shipping goods across the supply chain,” Morley continues. “It brings a new level of transparency to supply chain processes, something that lenders have typically struggled to achieve to date, especially for shipments moving across multiple country borders.”

BlockEx’s platform allows for digital asset creation, issuance and trading. The startup works with trading firms, institutions and governments, providing bespoke blockchain implementations and proof of concepts.