European Banks Select IBM Blockchain for Small Business Trade Finance

IBM has been chosen by Digital Trade Chain, a consortium of major European banks, to build a new blockchain platform for SMEs.

AccessTimeIconJun 26, 2017 at 10:08 p.m. UTC
Updated Sep 11, 2021 at 1:29 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

A group of seven major European banks is working with IBM to build a new blockchain-based trade finance platform for small- and medium-sized enterprises.

IBM will build and host the platform for the Digital Trade Chain Consortium (made up of seven banks including Deutsche Bank, HSBC, KBC, Natixis, Rabobank, Societe General and Unicredit), with the goal of facilitating easier and more transparent domestic and cross-border trade for smaller businesses.

The platform will be built on the Linux Foundation's Hyperledger Fabric blockchain and will run on the IBM Cloud.

"What we'll be building is a user interface that the banks will make available through their environment to the end SME clients, for the buying SME and the selling SME. The bank will be responsible for onboarding, KYC, all those aspects associated with the client relationship," Keith Bear, VP of global financial services at IBM, told CoinDesk.

He added:

"The bank will then be running nodes within the business network, which for most of them will be facilitated by our cloud environment."

The forthcoming blockchain solution is being designed to reduce transaction costs and increase transparency for SMEs. Citing figures from the World Bank, Bear said that up to 50% of SMEs don’t have to access formal credit channels.

In this light, the blockchain solution will be the first step in addressing this financing gap for small businesses.

"It's a large and important marketplace, but it's not really well served by trade finance capabilities," said Bear. "That could clearly be an inhibitor to them being able to trade internationally and potentially domestically as well."

The solution is currently in development with a plan to go into implementation by the end of 2017.

European flags image via Shutterstock

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.