Standard Chartered and global food manufacturer IFFCO Singapore (ISPL) have completed their first cross-border trade finance transaction using the dltledgers blockchain platform.

The deal involved palm oil and its extracts, which provide US$100mn-worth of business a year for IFFCO Group, being shipped from Asia to the Middle East. ISPL used invoice financing on the buyer side and digital avalisation for documents on the seller side of the trade. Avalisation of a bill is a third-party’s, often a bank’s, guarantee to honour payment of a bill of exchange. Standard Chartered was involved on both sides of the transaction.

The transaction was executed in three hours rather than the typical 10-day paper-heavy process. ISPL believes the platform could help the firm carry out multiple transactions a day, improving process efficiency and reducing financing costs by 20-25%.The dltledgers platform is Hyperledger Fabric-based and enables commodity traders to connect to their supply chain network and digitise trade processes and financing documentation.

The transaction had more than 50 documents and eight bills of ladings. Transactions of this nature involve a lot of paper-intensive manual activities and multiple parties. For companies involved in high trade volumes, digitisation of the end-to-end trade and trade finance operation makes this complex process significantly more efficient.

Samuel Mathew, global head of documentary trade at Standard Chartered says: “We are seeing a strong adoption by corporate clients like ISPL for dltledgers’ blockchain platform for cross-border trade.  This will surely reduce fraud and related risk and build cross-border interconnectivity, helping banks to move away from paper-based manual complex transactions involving multiple buys and sells into a seamless, more secure and efficient flow.”

Earlier in the year, Standard Chartered completed its first trade finance transaction on the dltledgers platform for Agrocorp International in Singapore, facilitating the early payment for agricultural products purchased from Associated Grain Corp in Australia, and resold to a customer Bangladesh.

The bank is looking to elevate its digitisation efforts; in August it completed its first joint deep-tier supply chain financing transaction with one of China’s largest B2B-focused, independent supply chain platforms Linklogis, using blockchain technology. Prior to this,
the bank partnered with IBM to launch a service to automate the retrieval of information from trade documents, called Trade AI Engine.