Nine European banks have taken a crucial step to making blockchain available to their corporate clients, creating a legal entity for the expansion of the we.trade platform.
The joint venture is incorporated in Dublin under the name we.trade Innovation DAC and includes the nine founding banks as equal shareholders: Deutsche Bank, HSBC, KBC, Natixis, Nordea, Rabobank, Santander, Société Générale and Unicredit.
The company will manage and distribute the platform, with the target of bringing it to commercial clients in the summer of 2018. In the first stage, it will cover 11 European countries: Belgium, Denmark, Finland, France, Germany, Italy, the Netherlands, Norway, Spain, Sweden and the UK.
Powered by the Hyperledger Fabric blockchain framework, we.trade is a platform for managing, tracking and protecting trade transactions between SMEs. It will connect parties involved in a trade deal in one place, help SMEs initiate new trading relationships as well as provide easy access to trade finance.
Originally known as Digital Trade Chain, the consortium rebranded as we.trade last year. The platform has been developed by the nine founding banks together with IBM, who say they are currently “successfully testing” transactions.
Roberto Mancone, who was previously global head of disruptive technologies and solutions at Deutsche Bank, has been appointed COO of the venture.
He says the creation of the legal entity is evidence that the application is “no longer a proof of concept, but a company with its own team that is set to deliver the first concrete blockchain-based enterprise grade, resilient and commercially viable application globally”.
The announcement comes after the consortium unveiled its roadmap for the project at the Sibos conference in October. At the time, the founding group anticipated the platform would have full deployment to the market at the start of Q2, but it now seems that this timeline has been pushed back.
Speaking to GTR, Mancone says the project is “pretty much in line” with the original timetable, and that any delays would amount to no more than a month and a half. “I wouldn’t say we have had issues, it’s just normal with a project like this, which involves nine banks and different jurisdictions. We want to make sure that we are fulfilling all the security aspects of the platform. This is not just an application, we’re developing a platform that will be licenced to traditional banks, so we need to make sure that those banks are comfortable.”
He also points to additional work having to be done to ensure the application is compliant with Hyperledger Fabric 1.1, a version of the framework that was released last month.
“We need to follow the evolution of the technology and make sure that what we built is also functioning with the new release of Hyperledger Fabric, which is beyond our control. This will continue in the future, because Hyperledger Fabric will constantly evolve and we are building a platform that will be stable with future releases.”
The next stage of the we.trade project, which will begin after the platform is live, is to expand to additional markets in Europe and beyond by onboarding new banks.
Hubert Benoot, KBC’s head of trade and chairman of we.trade, says the “demand is high” for the new platform.
“A number of banks and clients have expressed an interest in becoming a part of the we.trade offering,” he says. “Our focus is to deliver the solution in a timely manner by this summer, to companies which are looking for efficiency in their sales and supply chain journey. We are also planning to make the platform available to more businesses in Eastern Europe and Asia, as well as to expand the service offering by partnering with third-party providers.”
Although progress of the platform to date has been driven mainly by the founding banks, the consortium has from the start said it intends to make we.trade available for others to join on a licence-type basis. This approach will enable we.trade to expand to as many banks as possible – and as quickly as possible.
“We are currently talking to several banks and offering them to join as member banks. They will have their own node on the blockchain and will be able to give their clients access to we.trade. We’ll create a user group to enable them to contribute to the solution’s roadmap,” Anne-Claire Gorge, global head of product management, trade services, at Société Générale, told GTR in an interview in December.
“It’s faster and easier to onboard as a member bank. We can’t exclude the possibility to add new shareholders, but we want to stay swift and agile which is not easy with too many shareholders,” she added.
Mancone says that the pace of which new banks will be onboarded will depend not only on the readiness of we.trade platform itself, but also “the willingness of the banks” that are in the pipeline.
“Right now we have a strong manifestation of interest but of course they need also to commit contractually and then prepare to join, so it’s a two-way effort,” he ends.