Dry bulk shipping has taken a transformative step with news of a landmark blockchain initiative. Hashtagged #TransformingTrade, banking giant HSBC tweeted that it, along with Dutch bank ING, have just used Corda blockchain technology to finance a shipment of soya beans from Argentina to Malaysia for food and agriculture conglomerate Cargill.
The letter of credit backed a shipment of soybeans transported last week from Argentina to Malaysia. The transaction was an end-to-end trade between a buyer and a seller and their respective banks that was completed on one shared digital application rather than multiple systems, according to HSBC. It was the first scalable live trade finance transaction using blockchain, it added.
“This is an inflection point for how trade is conducted,” Vivek Ramachandran, HSBC’s global head of innovation and growth for commercial banking, said in the statement. “With blockchain, the need for paper reconciliation is removed because all parties are linked on the platform and updates are instantaneous.”
While to date most blockchain developments in shipping have tended to focus on the container segment there have been some notable developments in dry bulk prior to this Cargill news.
Late last year Louis Dreyfus sealed the world’s first agricultural commodity trade to use blockchain. The French trading house used the technology to sell a cargo of US soybeans to China’s Shandong Bohi Industry.
In January this year Prime Shipping Foundation -an open-source project by Gibraltar-based Quorum Capital and shipbroker Interchart –revealed it was behind the world’s first freight deal settled in Bitcoin. Executed in December on a vessel carrying wheat from Russia to Turkey, the financial transaction was a trial ahead of a roll out of services from Prime Shipping expected later this year. The deal was for 3,000 metric tons of Russian wheat shipped from Rostov-on-Don to Samsun in Turkey.
HSBC & ING Bank have used Corda blockchain technology to finance a shipment of soya beans from Argentina to Malaysia for food & agriculture conglomerate Cargill. Revolutionising the future of Documentary Trade. #TransformingTrade pic.twitter.com/MOBA1gQYIl
— HSBC (@HSBC) May 13, 2018