UAE’s Abu Dhabi Commercial Bank (ADCB) announced that it has adopted blockchain for trade finance using Singapore’s dltledgers blockchain platform. The bank’s first transaction involved moving goods for Western Red Spring Canadian Wheat worth $6.5 million, from Canada to Bangladesh.
With this financing, ADCB said it becomes the first bank in the UAE to run an end-to-end blockchain trade finance transaction. Krishnakumar Duraiswamy, ADCB’s Group Head of Trade Finance, said, “This private network allows ADCB to service corporate customers in real-time, increasing transparency and building cross-border interconnectivity.”
In trade finance, blockchain improves the transaction’s speed and transparency for the parties involved. It provides a common platform for businesses to execute trade deals, thus reducing the risk of fraud. Meanwhile, an automated payments system ensures that deal promises are met in time.
Singapore-based dltledgers has a platform which combines both supply chain traceability and the trade finance aspect. Dltledgers said it has over 30 banks and over 400 traders on its platform. The company added that the collaboration with ADCB is to expand in the Middle East and Africa region.
“We are very bullish of our partnership with ADCB and the region. The growth and sustenance of the global $8 trillion open account trade finance market are heavily reliant on the easy availability and robustness of financing mechanisms,” said Samir Neji, founder and CEO of dltledgers.
Other parties involved in the transaction were Islami Bank (Bangladesh), SGS Surveyor, Richardson International Shipping Canada, Banjo Auto Flour Mill Bangladesh and Agrocorp, the large Singapore-based trading house.
Agrocorp is perhaps Dltledgers’ biggest client and has processed more than $100 million in transactions on the platform.
Nitin Jain, Head of Treasury & Capital Markets, Agrocorp International said, “We could potentially reduce our financing costs by at least 15-20% through dltledgers, saving significantly on the costs of physically moving documents.”
While Dltledgers is targeting other sectors, to date, the bulk of transactions have been agribusiness. Other high profile banks on the platform include Standard Chartered and DBS Bank.
Dltledgers had recently announced that it had processed over $1 billion in trade finance in 18 months.
Dltledgers has two models. The one is a SaaS monthly subscription which applies to 80% of customers. For those who want a pay-as-you-go experience, they pay a setup fee and $75 per transaction. The technology is based on Hyperledger Fabric.
