On January 6, Hong Kong-based blockchain firm CryptoBLK launched a trial of its open account trade finance solution called the ATLAS Alpha Network with Microsoft as a strategic partner.
Outside of this new venture, CryptoBLK has some serious credentials. It is the developer behind the Letter of Credit blockchain network (formerly Voltron) founded by eight global banks including HSBC, ING and Standard Chartered. Additionally, it counts Thailand’s central bank as a client.
Since the launch of the ATLAS Alpha Network, over 25 organizations including banks, financiers and enterprises, have signed up for the four-week trial to get hands-on experience of CryptoBLK’s ATLAS platform.
CryptoBLK, through ATLAS, is digitizing the end-to-end process of invoice financing, factoring, purchase order financing and pre- or post-shipment financing. Under the four-week trial, participants will undergo training, outline business cases and test the ATLAS platform using real-world scenarios.
Initially, banks and financiers are the primary target, and they are encouraged to bring along their SME clients. CryptoBLK confirmed to Ledger Insights that the platform is global.
According to data from the Asian Development Bank, the global trade finance gap currently stands at $1.5 trillion. It also said that more than 40% of trade finance applications rejected by banks were from small and medium-sized enterprises. Legacy trade finance processes are primarily paper-based and lack transparency, leading to errors and high costs. And for SMEs in particular, blockchain can help to add authenticity by verifying the invoice being financed is real.
The ATLAS platform aims to provide a single place for buyers, suppliers, financiers and other supply chain finance stakeholders, servicing all their trade finance needs. The web portal offers an at-a-glance overview of all open trade financing loans and connections across multiple trade parties. While providing easy access to credit for companies, the platform reduces risk and cost for financiers.
CryptoBLK has built the Atlas platform using R3’s Corda blockchain. It is hosting the participant blockchain nodes on Microsoft Azure in different continents simultaneously.
“Our DLT solution ATLAS enables enhanced trust and transparency in the trade finance processes, and unlocks new business opportunities in the trade finance industry,” said Duncan Wong, CEO of CryptoBLK. “We are excited to launch the ATLAS Alpha Network and grateful to the support from our strategic partner Microsoft.”
But CryptoBLK’s new venture faces multiple competitors. In international open account trade finance, Marco Polo is initially targeting larger enterprises, but we.trade is aiming at SMEs. CryptoBLK client HSBC is also a member of we.trade, as well as Société Générale, UBS and ten other major banks.
Last year we.trade announced a partnership with the trade finance initiative from the Hong Kong Monetary Authority (HKMA), the eTradeConnect platform. This network features several international banks including BNP Paribas, HSBC and Standard Chartered as well as Hong Kong subsidiaries of big Chinese banks such as ICBC, the Agricultural Bank of China and the Bank of Communications.
Plus there are multiple blockchain trade finance platforms on the Chinese mainland. Perhaps the most relevant because of its international focus is the “Bay Area Trade Finance Blockchain Platform” (BATFB) initiated by China’s central bank. It targets the Guangdong, Hong Kong, and Macau Areas and has processed more than $10 billion in financing to date.
And elsewhere in Asia, Singapore startup dltledgers has racked up more than $1 billion in financing on its blockchain platform.
As mentioned, CryptoBLK is the developer behind the blockchain Letter of Credit platform, which last year carried out a six-week trial with over 50 banks and corporates.
CryptoBLK previously worked with the Hong Kong Federation of Insurers to launch a blockchain proof of insurance system, to verify the authenticity of motor insurance cover notes in real-time. Additionally, it is also participating in the Bank of Thailand’s Central Bank Digital Currency (CBDC) initiative called Project Inthanon.