Today, commodity trader Trafigura and DBS announced the launch of an open-source blockchain platform in Singapore with support from Infocomm Media Development Authority (IMDA), the International Chamber of Commerce (ICC), Enterprise Singapore and blockchain developer Perlin.
Dubbed as the ICC TradeFlow platform, the initiative aims to streamline trade flows by eliminating manual paper-based processes. The announcement said the blockchain platform could potentially reduce end-to-end document transit time to 20 days from 45 days.
The platform is built using IMDA’s TradeTrust interoperability framework and leverages Perlin’s blockchain technology. With the focus on interoperability, Trafigura said the platform could communicate with existing and future digital trade platforms. Later this month there will be a pilot for $20 million worth iron ore to be shipped from Africa to China.
“By tapping into each other’s respective expertise in commodities and finance, our customers will be able to receive their goods at least 50 percent faster with much less paperwork,” said Tan Su Shan, Head of Institutional Banking, DBS Bank.
While the initial objective is to reduce document transit time, the group plans to add more functionalities to the ICC TradeFlow platform. These include trade finance services, background information and credit ratings of trade participants, vessels and couriers to streamline trade processes. However, the Perlin blockchain is not yet in production.
The platform gets an edge here due to its association with the ICC, the world’s largest business association. “The technological, economic and governance-based precedents and standards set in Singapore will support adoption in other countries and ultimately greater growth in trade on a global scale,” said John W.H. Denton AO, Secretary-General of the ICC.
It is interesting to see that Trafigura, which is a major oil trader, did not invest in commodity trade finance blockchain Komgo or post-trade oil blockchain VAKT. However, based on comments by Komgo at a conference earlier this year, we believe Trafigura is using or plans to use Komgo. Two months ago, Trafigura completed a trade finance blockchain pilot with Sberbank for the supply of West Siberian Oil.
By comparison, DBS is no stranger to blockchain. Last year, the bank collaborated with Agrocorp to use blockchain for trade finance. This was one of the first transactions carried over the dltledgers platform which has now processed well over $1 billion in trade finance. Two months ago, DBS launched a supply chain finance blockchain named Rong-E Lian in China.