Banking News

Alfa-Bank, Commerzbank pilot Marco Polo blockchain trade finance network

steel pouring

Russia’s Alfa-Bank and Germany’s Commerzbank have executed a cross-border payments pilot on the Marco Polo blockchain network. The trial aims to build an end-to-end trade finance and supply chain finance solution for Novolipetsk Steel (NLMK) and Vesuvius GmbH.

NLMK claims to be the largest steel producer in Russia, and Vesuvius is an engineering company that produces solutions for steel flow control used in the casting process.

Started in 2017, the Marco Polo Network now has at least 23 bank members, including the two mentioned in this article. The Network is underpinned by R3’s Corda blockchain, operated by TradeIX and offers open account solutions.

To integrate with the Marco Polo Network, corporates like Novolipetsk Steel can use either Application Programming Interfaces (APIs) or ERP integration with platforms such as Microsoft Dynamics 365, Xero, and Oracle Netsuite. The Marco Polo solution allows enterprises to secure financing from multiple banks using a single dashboard.

“Projects such as Marco Polo create added value for clients ensuring more international trade transparency and manageability thanks to integrated bank payment, finance and discount instruments”, said Dina Merkulova, Head of Trade Finance at Alfa-Bank.

But for most banks and corporates, one of the biggest benefits is digitization.

“Integrated working capital solutions directly related to the contract, issued invoices and shipping documents definitely benefit all the parties, and our experience with Marco Polo demonstrates that core processes can really be streamlined,” said Christian Greving, Cash Coordinator Treasury, Vesuvius GmbH.

Currently in the pilot phase, the Marco Polo Network Is expected to go into production soon.

Recently, Daimler, Dürr and LBBW carried out a trade finance trial on Marco Polo. The transaction involved the order and delivery agreement for a balancing system from Dürr.

A few months ago, LBBW and Commerzbank completed a pilot for data transfer of transactions between engineering technology company Voith and pump and valve manufacturer KSB SE.

Last month, Bank of America announced it joined the Marco Polo Network. Big names which are a part of this Network include Mastercard, ING, Standard Chartered, Natwest, Bangkok Bank, BNP Paribas and Standard Bank among several others.