Today Ant Group announced Trusple, a new blockchain platform for international trade that targets SMEs and banks. At launch it has partnered with BNP Paribas, Citi, DBS Bank, Deutsche Bank, and Standard Chartered. Ant is the company behind Alipay, the largest mobile payment platform in China, which claims to have more than 1.2 billion users globally. The group is currently conducting an IPO which some have predicted could give a $200 billion valuation.
The name Trusple is derived from “Trust Made Simple”. Once a trade is recorded on the platform, smart contracts can automatically update information, including delivery progress. But it also will integrate trade finance, enabling automated bank payments using smart contracts. In the first instance, the banks will provide payment guarantees. Banks are keen on blockchain because it can reduce their risk of granting credit by verifying the buyer’s transaction.
“Trusple was designed to solve problems for SMEs and financial institutions involved in cross-border trading,” said Guofei Jiang, President of Advanced Technology Business Group, Ant Group. “We look forward to making cross-border trading safer, more reliable, and more efficient for buyers and sellers, as well as for the financial institutions that serve them.”
The solution is powered by AntChain, the in-house developed blockchain, which unusually is proprietary rather than open source. We believe Trusple is a software solution, a little like IBM and Maersk’s TradeLens offering but for SMEs. Many trade finance platforms such as we.trade, komgo and Contour, have a shared governance structure where a group of banks or industry firms call the shots. Here we believe the governance will be down to Ant.
So not only will Ant have quicker governance, but it’s very fast-moving in any case. Furthermore, it can leverage its association with Alibaba, a platform designed to help SMEs trade across borders. Ant has been so successful that it’s one of the drivers behind the Chinese government’s launch of a central bank digital currency because Alipay and WeChat Pay are now the main retail payment rails in China. Hence, this is an opportunity for Ant to extend its dominant position into another sector.
Trusple is not the only blockchain trade and trade finance solution targeting SMEs. Earlier this year at the World Economic Forum, an agreement was signed for the TradeTrust network by the International Chamber of Commerce (ICC), the Singapore Government, and several global firms, including DBS and Standard Chartered. TradeTrust and Trusple are not necessarily mutually exclusive because TradeTrust’s objective is to enable interoperability across different trade platforms. we.trade is also targeting the SME sector in Europe.
Standard Chartered was the first bank to complete a transaction on the Trusple platform, although it commented that the “use of blockchain will be enabled in due course.”
“SME’s around the world contribute up to 40 percent of GDP in emerging economies and are important contributors to job creation,” said Neil Daswani of Standard Chartered. “By integrating our leading financial capabilities into the Trusple network, we have a real opportunity to facilitate these businesses’ participation in the growing intra-Asia trade ecosystem and support the development of sustainable supply chains in the region.”
Standard Chartered has an existing relationship with Ant through a cross border remittance app. It’s also a backer of Chinese supply chain platform Linklogis, and a founding member of the Contour trade finance network where BNP Paribas, Citi and DBS are also members.