Blockchain is not just for Bitcoin. In article for the TradeReady blog, Gerhard Schipp, Commerzbank’s Head of Product Management Trade & Supply Chain Finance, explains that distributed ledger technology could enhance the efficiency, transparency and security of cross-border trade transactions. He notes that applying blockchain to trade could also allow banks comprehensive, real-time overviews of their customers’ supply chains – meaning they would be better able to provide risk mitigation, inject financing, and optimise liquidity.
There remains much work to do, however, before trade finance can properly unlock the power of blockchain. According to Schipp, banks need to identify specific use cases, finding out exactly how distributed ledgers can enhance their customers’ trade. Technical challenges will have to be overcome, and standards established to preserve blockchain’s key selling point – its interconnectivity. Schipp sees collaboration and the sharing of ideas and experiences between banks, technology providers and other trading counterparties as the way forward.
Read the article here.