Today, development finance institution Eastern and Southern Trade and Development Bank (TDB) said it carried out a blockchain trade finance transaction on dltledgers platform along with Singapore’s Agrocorp. The transaction involved a $22 million white cane sugar trade from Asia to Africa.
For dltledgers this represented another milestone after it passed the $1 billion mark in transactions using its platform several months bank. The startup says its the first trade on its platform for Africa and the largest single transaction.
Agrocorp acted as the seller and trading partner, and shipped 50,000 metric tons of white cane sugar to a buyer in one of TDB’s member states, with TDB as the negotiating bank. With trade finance using blockchain, TDB was able to save four days in processing the transaction, and dltledgers expects the number to reach eight days in upcoming trades.
TDB provided a blockchain letter of credit confirmation and discounting for this transaction over the dltledgers platform. In 2014, the African Development Bank, a shareholder of TDB, found that trade finance gap in the region was about $120 billion. The bank aims to bridge this gap by using blockchain and boosting trade exchanges.
“With this transaction, we have the potential to revolutionize how we finance cross-border trade at the Bank. Not only will it impact our bottom-line, but it will enable us to reduce processing time, be more responsive to our clients, and de-risk transactions,” said Michael Awori, COO of TDB.
Singapore-based dltledgers has plans to expand its footprint around the globe, and this transaction with TDB seems like a step towards it. “We are now establishing presence in Japan and MENA, and project to carry out $10bn worth of African trade transactions with the Asia Pacific region, including Japan by June 2020,” said Samir Neji, CEO of dltledgers.
This is not the first African blockchain trade finance initiative. A few months ago, South Africa’s Standard Bank joined the Marco Polo trade finance network.
Meanwhile, IFFCO Singapore (ISPL) recently launched its trade and trade finance blockchain platform developed by blockchain firm dltledgers.